- The global average premium for VLSFO over HSFO has dropped below $100/mt for the first time since January.
- The spread fell to $99.50/mt on Wednesday.
The global average premium for VLSFO over HSFO — a key measure of profitability for scrubbers — has dropped below $100/mt for the first time since January, reports Ship&Bunker.
First Fall Since January
The spread fell to $99.50/mt on Wednesday and has remained below $100/mt since then, according to Ship & Bunker’s G20 Index of prices at 20 leading bunkering ports. Previously it had remained wider than $100/mt since January 28.
Oil Prices Drop
The narrowing of the spread has accompanied the recent drop in crude prices, with the frontmonth Brent contract losing $5.41/bl last week. HSFO prices have dropped less sharply than VLSFO in response to the fall in crude, buoyed by demand from the power generation sector.
Freight Market Demands
A prolonged narrowing of the scrubber spread would be likely to dent enthusiasm for the emissions-cleaning systems. Demand for the systems in the container segment has already been dampened by the current surging freight market, with owners unwilling to take ships out of the market for retrofits while profits are so high.
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Source : Ship&Bunker
