Fuel Switch Snapshot: LNG Rises Towards VLSFO

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VLSFO benchmarks remain stable

Rotterdam’s fossil LNG bunker price has edged closer to its VLSFO by $7-8/mt over the past week, now making it 54-66/mt cheaper than VLSFO.

The price gap between LNG and VLSFO has narrowed even further by $34/mt in Singapore because of the sharp rise in LNG bunker price. LNG bunker price in Singapore is now at a $30-36/mt discount to its VLSFO, depending on whether the estimated EU Allowance (EUA) costs are added to their bunker fuels costs.

VLSFO

Rotterdam’s VLSFO benchmark inched $1/mt lower in the past week. When we add estimated EUA costs, there is only a slight decline of $1-2/mt, depending on whether we are looking at voyages between EU ports or between EU ports and non-EU ports.

VLSFO availability has improved in Singapore, with most suppliers suggesting lead times of 4-7 days, much shorter than the previous week’s 6-12 days.

Biofuels

Rotterdam’s B24-VLSFO HBE bunker price has moved $8/mt lower in the past week.

Prices for palm oil mill effluent methyl ester (POMEME) have declined by $25/mt to $1,298/mt in the past week. This has partly contributed to the bio-bunker price declines in Rotterdam. POMEME-based biofuels can qualify for advanced biofuel rebates through the Dutch HBE system.

LNG

Rotterdam’s LNG bunker benchmark has seen a modest $6-7/mt gain in the past week, depending on whether estimated EU ETS costs are included in the cost of fuel. The gains have mirrored increases in the front-month NYMEX Dutch TTF Natural Gas benchmark.

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Source: Engine.online