- Global bunker indices showed no clear trend, with mixed fluctuations in key fuel segments.
- Scrubber Spread remained below the breakeven mark, reflecting stability near $100.
- European gas prices held steady amid strong inventory levels and seasonal demand.
- LNG bunker fuel prices increased, widening the gap with conventional fuels.
- Shipping emissions have stagnated since 2018, highlighting the need for intensified carbon reduction efforts.
According to LinkedIn, global bunker indices exhibited irregular changes during Week 47, with no definitive trend emerging. The 380 HSFO index dropped by 2.13 USD to 518.49 USD/MT, while the VLSFO index declined by 1.26 USD to 597.00 USD/MT, breaking below the 600 USD threshold. On the other hand, the MGO index increased by 3.90 USD, reaching 761.64 USD/MT. This reflects a continued lack of direction in the global bunker market.
Scrubber Spread Dynamics
The MABUX Global Scrubber Spread (SS), which measures the price difference between 380 HSFO and VLSFO, edged up by 0.87 USD to 78.51 USD but remains well below the breakeven level of 100 USD. The weekly average of the spread decreased slightly, suggesting continued contraction. Regional data revealed mixed movements: Rotterdam saw an increase of 8.00 USD, while Singapore’s spread widened by 1.00 USD but experienced a decline in the weekly average. The overall trend indicates the spread is stabilizing near or below the 100 USD mark, with no significant changes expected in the short term.
Stability in European Gas Prices Amid Seasonal Shifts
European gas indices remained stable through November due to high inventory levels, despite a forecasted cold snap that may increase withdrawals and support prices. On November 18, the TTF gas benchmark rose by 1.413 euros/MWh to 45.668 euros/MWh, reflecting strengthening winter demand. Regional storage facilities were reported at 90.30% capacity, a slight decrease from the previous week. The competitiveness of the TTF index will depend on global LNG price spreads, freight rates, and weather-driven demand fluctuations.
Rising LNG Prices as Bunker Fuel
The price of LNG as bunker fuel continued its upward trend in the port of Sines, Portugal, climbing by 39 USD to reach 966 USD/MT by November 18. The price gap between LNG and conventional fuel widened to 235 USD in favor of MGO LS. On the same day, MGO LS was priced at 731 USD/MT in Sines.
Market Differential Index Observations
The MABUX Market Differential Index (MDI), which compares market bunker prices against the MABUX digital benchmark, highlighted varying trends across major ports: Rotterdam, Singapore, Fujairah, and Houston. The 380 HSFO segment showed Rotterdam as overvalued, while other ports remained undervalued. In the VLSFO segment, Rotterdam and Houston were undervalued, whereas Singapore and Fujairah were overvalued. For MGO LS, all four ports remained undervalued, with notable index increases in Singapore and Fujairah. The overall analysis suggests continued undervaluation across key ports, with no significant shift in market dynamics.
Stagnation in Shipping Emission Reductions
A recent report by UCL and UMAS indicates that international shipping emissions have plateaued since 2018, posing a challenge to the IMO’s goal of reducing emissions by 20-30% by 2030. Despite a decline in emissions between 2008 and 2014, levels returned to their 2008 baseline by 2018 and have since remained static. The report emphasizes the need for improved fleet efficiency, better alignment of shipping demand with fleet capacity, and higher fleet utilization to achieve significant carbon intensity reductions.
Outlook for the Coming Week
The global bunker market is expected to maintain its pattern of mixed fluctuations without a definitive trend. Geopolitical developments may lead to temporary price volatility, while broader market dynamics are likely to remain steady.
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Source: LinkedIn
