In Week 36, global bunker indices saw a consistent decline. The 380 HSFO index dropped by USD 13.20, settling at USD 513.00 per metric ton, nearing the USD 500 mark. The VLSFO index also decreased by USD 12.95, falling to USD 620.51 per metric ton. The MGO index saw a notable decline of USD 17.15, with its price reaching USD 770.68 per metric ton. This downward trend in global bunker indices has continued into the current week.
Scrubber Spread Insights
The MABUX Global Scrubber Spread (SS), which represents the price difference between 380 HSFO and VLSFO, remained relatively stable, showing a slight increase to $107.51, up by $0.25 from the previous week. The weekly average also saw a rise of $4.98. In Rotterdam, the SS Spread value held steady at $101.00, with the weekly average increasing by $10.00. Conversely, in Singapore, the spread between 380 HSFO and VLSFO grew by $9.00, reaching $175.00, and the weekly average in the port rose by $14.34. The Global SS Spread and index readings at major ports remain above the SS Breakeven mark of $100.00, indicating a potential return to profitability for the 380 HSFO + scrubber combination. The upward momentum of the SS Spread is expected to continue into the next week.
European and US Natural Gas Markets
The global natural gas market is showing mixed dynamics. The European market remains optimistic, with natural gas futures holding steady around €40 per megawatt-hour. This stability is supported by supply constraints due to annual maintenance in Norway and ongoing geopolitical tensions, which have reduced Norwegian gas supplies by 10 million cubic meters per day. Despite these challenges, European storage facilities are robust, with levels at 92.52% full as of September 3. In contrast, the US market is lagging, with the European gas benchmark TTF decreasing by 1.496 EUR/MWh, from 38.689 EUR/MWh the previous week to 37.193 EUR/MWh.
LNG Prices and Market Dynamics
By September 3, the price of LNG as bunker fuel in the port of Sines, Portugal, increased by $16 from the previous week, reaching $863 per metric ton. The price gap between LNG and conventional fuel (MGO LS) widened to $112, compared to $76 the previous week. On the same day, MGO LS was quoted at $751 per metric ton in Sines.
Market Price Correlation and Trends
The MABUX Digital Index (MDI), which measures the correlation between market bunker prices and the MABUX digital bunker benchmark, showed varied trends across major global hubs. In the 380 HSFO segment, all four ports were undervalued, with weekly averages rising in Rotterdam, Singapore, Fujairah, and Houston. For the VLSFO segment, Singapore and Fujairah were in the overvalued zone, while Rotterdam and Houston remained undervalued. The MGO LS segment remained undervalued across all ports, with Rotterdam and Singapore MDIs stable above the $100 mark, and Houston’s MDI approaching the 100% correlation mark. The balance of overvalued and undervalued ports is expected to remain mixed.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe!
Source: LinkedIn India
