- Scrubber Spread Sees Gradual Recovery Towards Breakeven Levels.
- EU Considers Extending Mandatory Natural Gas Storage Targets.
- LNG Prices Rise While MGO LS Grows More Cost-Effective.
In the 6th week, the MABUX global bunker indices showed a moderate decline. The 380 HSFO index fell by $4.26 from $533.61/MT last week to $529.35/MT. The VLSFO index declined by $2.79 and came closer to the $600 mark, falling from $621.93/MT to $619.14/MT. The MGO index lost $3.81, from $787.07/MT last week to $783.26/MT. The global bunker market is currently still showing a moderate decline, reports LinkedIn.
Scrubber Spread Trends and Regional Variations
The MABUX Global Scrubber Spread (SS), which is the spread at which 380 HSFO sells higher than VLSFO, edged up. It rose to $89.79 from $88.32 at a time when it is considered close to breaching the critical $100.00 SS break-even level. Its weekly average also rose by $3.32. In Rotterdam, the SS Spread jumped by $9.00 in one week to $98.00 against last week’s $89.00. The weekly average in Rotterdam also increased by $13.84. In Singapore, the spread between 380 HSFO and VLSFO decreased by $4.00, from $84.00 to $80.00, with the weekly average decreasing by $1.84. These changes show a slow recovery toward SS Breakeven levels, making 380 HSFO + scrubber more cost-effective than VLSFO. This pattern is likely to continue in the next week.
EU Gas Storage and Market Impact
The European Union is considering extending mandatory natural gas storage targets for member states beyond 2025. Since 2022, the EU has required storage levels to reach 90% capacity by November 1 each year. As of February 4, European regional storage facilities were 51.97% full, showing a decrease of 3.49% from the previous week and a 19.36% drop since the start of the year. The European gas benchmark TTF rose by €3.824/MWh, surpassing the €50.00/MWh threshold and reaching €52.048/MWh, compared to €48.224/MWh last week. The price of LNG as a bunker fuel in Sines (Portugal) rose by $24 over the past week, reaching $991/MT on February 3. The price gap between LNG and conventional fuels widened, with MGO LS priced at $770/MT, making the difference $221 in favor of MGO LS, compared to $188 the previous week.
MABUX Market Differential Index (MDI) Trends
During Week 06, the MABUX Market Differential Index (MDI), which compares market bunker prices (MBP Index) to the MABUX digital bunker benchmark (DBP Index), showed mixed trends across major ports. In the 380 HSFO segment, Singapore remained the only overvalued port, with its weekly average increasing by 7 points. Rotterdam, Fujairah, and Houston were undervalued, with Rotterdam seeing a 2-point drop in margin, Fujairah a 14-point drop, and Houston a 3-point increase. In VLSFO, Rotterdam entered the overcharge zone along with Singapore, where its weekly averages climbed 16 points in Rotterdam and 6 points in Singapore. Fujairah and Houston are still undervalued, and the index is down 6 points in Fujairah and up 1 point in Houston.
In MGO LS, Rotterdam and Singapore again entered the undervalued zone, hence, all four ports are undercharged. The weekly averages went up by 13 points in Rotterdam, by 7 points in Singapore, and by 11 points in Houston. Fujairah is down by 10 points. The bunker fuel switch into the overcharge zone has slowed as well, as only one port in the 380 HSFO segment is now overvalued, two ports in the VLSFO segment, and all of them are still undervalued in the MGO LS segment. For the following week, mixed dynamics are foreseen with no leading trend of the MDI index balance.
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Source: LinkedIn