MABUX: Bunker Weekly Outlook – Week 20

89

  • During Week 20, the global bunker indices monitored by MABUX continued to show a modest decline.
  • The 380 HSFO index dropped by 2.27 USD to 544.54 USD/MT, while the VLSFO index fell by 1.27 USD to 658.35 USD/MT.
  • The MGO index experienced a larger decrease of 5.92 USD, settling at 840.38 USD/MT.
  • Despite this trend, a moderate upward correction was observed in the global bunker market at the time of writing.

The MABUX Global Scrubber Spread (SS), which measures the price difference between 380 HSFO and VLSFO, saw a slight increase of 1.00 USD, reaching 113.81 USD. In Rotterdam, the SS Spread continued to decline, dropping by 2.00 USD to 86.00 USD. Conversely, in Singapore, the spread increased by 8.00 USD, surpassing the 100 USD mark once again. Irregular changes in SS Spread are expected to persist.

Natural Gas Price Fluctuations

Forecasts suggest that phasing out natural gas prematurely could lead to significant price fluctuations, posing challenges to energy security and affordability. In Week 20, the European gas benchmark TTF continued to decline, falling by 0.94 EUR/MWh to 29.669 EUR/MWh.

LNG as Bunker Fuel

The price of LNG as bunker fuel at the port of Sines increased slightly, reaching 696 USD/MT on May 13, a rise of 9 USD from the previous week. The price differential between LNG and conventional fuel decreased to 117 USD in favor of LNG. On the same day, MGO LS was priced at 813 USD/MT at the port of Sines.

MDI Index Trends

The MDI index, reflecting the ratio of market bunker prices to the MABUX digital bunker benchmark, showed the following trends across major ports:

  • 380 HSFO Segment: All selected ports remained undervalued. Weekly averages fell by 5 points in Rotterdam and 3 points in Fujairah, while rising by 1 point in Singapore. The MDI index in Houston remained unchanged.
  • VLSFO Segment: All ports were undervalued. Weekly averages increased by 1 point in Rotterdam and 3 points in Houston, but decreased by 3 points in Singapore and Fujairah.
  • MGO LS Segment: Houston remained the only overvalued port, with the weekly average falling by 10 points. All other ports were undervalued, with average weekly levels declining by 4 points in Rotterdam and 7 points in Fujairah, but increasing by 11 points in Singapore.

Environmental Concerns in the Shipping Industry

A study by Chalmers University of Technology highlighted a concerning trend where many shipping companies continue using cheap heavy fuel oil due to its financial benefits, despite significant environmental costs. The use of scrubbers by these vessels has led to pollution with socio-economic costs exceeding €680 million between 2014 and 2022. Many shipping firms have already surpassed their break-even point with scrubbers, accumulating a surplus of €4.7 billion across approximately 3,800 vessels.

In response to environmental concerns, several countries, including Denmark, Germany, France, Portugal, Turkey, and China, have implemented bans on the discharge of scrubber water within their territorial waters. The downward trend in the global bunker market is expected to continue, with global bunker indices likely to maintain their moderate decline into the next week.

Did you subscribe to our daily Newsletter?

It’s Free! Click here to Subscribe

Source: LinkedIn