Global bunker prices continued their decline in the 10th week of the year. The moderate downward trend in the global bunker market is ongoing, reports MABUX on LinkedIn.
Global Scrubber Spread
The MABUX Global Scrubber Spread (SS), the price difference between 380 HSFO and VLSFO, continued its decline, falling $4.24 to $84.93, and remaining below the $100 breakeven point. The weekly average also decreased by $5.72.
- Rotterdam: The SS Spread dropped $14.00 to $63.00, with a weekly average decrease of $1.34.
- Singapore: The SS Spread narrowed by $8.00 to $45.00, briefly dipping below $40.00 on March 3rd. The weekly average decreased by $17.00.
This downward trend in the Global SS Spread is gradually making the VLSFO+Scrubber combination less profitable compared to using conventional VLSFO fuel.
The premium on European summer natural gas deliveries over winter futures has eased due to milder temperatures and ongoing talks regarding the conflict in Ukraine. While winter gas prices usually exceed summer prices, the recent trend has seen summer futures rise due to cooler temperatures and depleted European gas supplies. However, the current premium makes summer stockpiling uneconomical, and utilities in key European economies are urging government support for rebuilding gas reserves before the 2025/2026 winter.
Regional Storage Facility
As of March 04, European regional storage facilities were 37.63% full, marking a decrease of 2.67% compared to the previous week and a significant drop of 33.70% since the beginning of the year. The gas withdrawal process remains in an active phase. At the end of the 10th week, the European gas benchmark TTF halted its decline, decreasing by 0.827 euro/MWh but remaining firmly below the 50.00 euro/MWh mark, standing at 43.464 euro/MWh compared to 44.291 euro/MWh the previous week.
The price of LNG as a bunker fuel in the port of Sines (Portugal) fell by another $80 compared to the previous week, reaching $869/MT on March 03. Meanwhile, the price difference between LNG and conventional fuel also narrowed on March 03, standing at $124 in favor of MGO LS, down from $177 a week earlier. On that day, MGO LS was quoted at $745/MT in the port of Sines.
Market Differential Index
The MABUX Market Differential Index (MDI) for bunker fuel prices showed mixed trends across major ports in the 10th week:
- 380 HSFO:
- Rotterdam: Moved to overvalued, joining Singapore. MDI weekly average increased by 2 points.
- Singapore: Overvalued. MDI weekly average decreased by 3 points.
- Fujairah: Undervalued. MDI weekly average decreased by 4 points.
- Houston: Undervalued. MDI weekly average increased by 3 points.
- Rotterdam’s MDI showed near 100% correlation between market price (MBP) and digital benchmark (DBP).
- VLSFO:
- Rotterdam: Overvalued (only port in this category). MDI weekly average increased by 2 points.
- Singapore: Undervalued. MDI weekly average increased by 18 points.
- Fujairah: Undervalued. MDI weekly average increased by 14 points.
- Houston: Undervalued. MDI weekly average increased by 10 points.
- MGO LS:
- Rotterdam: Moved to overvalued. MDI weekly average increased by 15 points.
- Singapore: Undervalued. MDI weekly average decreased by 1 point.
- Fujairah: Undervalued. MDI weekly average decreased by 11 points.
- Houston: Undervalued. MDI weekly average decreased by 5 points.
- Rotterdam showed 100% MBP/DBP correlation.
- Fujairah’s MDI fell below the $100 threshold.
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Source: MABUX on LinkedIn
