- Higher gas prices and winter demand drive U.S. LNG cargoes away from Asia.
- Gas storage declines as withdrawals continue amid winter consumption.
- LNG bunker fuel in Sines falls by $44, narrowing its price gap with MGO LS.
Global MABUX bunker indices dropped for the fifth week. The 380 HSFO index fell by $7.03 to $533.14/MT, and VLSFO by $4.89 to $620.61/MT. Again, the MGO index declined the most with $17.40 to $786.75/MT falling below $800 again. No solid trend was found for the global bunker market, reports LinkedIn.
Global Scrubber Spread (SS) Trends
The Global Scrubber Spread (SS)—the difference in price between 380 HSFO and VLSFO—rose $2.14 to $87.47, still short of the $100 breakeven. The weekly average fell $1.31.
The SS Spread rose $7.00 to $82.00 in Rotterdam but fell $1.00 to $84.00 in Singapore. There is no trend apparent, and erratic fluctuations are expected next week.
U.S. LNG Exports Shift to Europe
With better gas prices and winter demand, U.S. LNG exports are turning away from Asia to Europe. In January, at least seven U.S. LNG tankers, which were set to journey through the Cape of Good Hope to Asia, turned back to European LNG terminals.
To date, as of January 28, European storage is 55.46% full, a 3.92% decline from last week and a 15.87% decline from early January. Gas withdrawals still are ongoing.
European Gas Prices Drop
The European gas benchmark TTF decreased by 1.803 EUR/MWh, and it fell below 50 EUR/MWh to 48.224 EUR/MWh. LNG bunker fuel in Sines (Portugal) decreased by $44 to $967/MT.
LNG vs. Conventional Fuel Price Gap Narrows
The MGO LS price in Sines was $779/MT, which narrowed the LNG vs. conventional fuel price gap to $188, from $209 the previous week.
MABUX Market Differential Index (MDI) Trends
The MABUX Market Differential Index (MDI), measuring market bunker prices (MBP) against the MABUX digital benchmark (DBP), was mixed across Rotterdam, Singapore, Fujairah, and Houston.
- 380 HSFO: Singapore remained overvalued, while Rotterdam, Fujairah, and Houston were undervalued.
- VLSFO: Singapore entered the overvalued zone, while the other three ports remained undervalued.
- MGO LS: Rotterdam and Singapore moved into overcharge territory, while Fujairah and Houston remained undervalued.
The market is going in the direction of overpricing, with undervaluation being in the lead. More information can be found on the Digital Bunker Prices page at mabux.com.
Biofuels in Shipping
Biofuels in shipping will depend on affordable biomass and competition from other sectors, DNV says. Most of the biofuels are consumed in road transport, mainly in the U.S., Brazil, and Norway, where blending mandates are in place. In 2023, biofuel was consumed at 0.6 Mtoe in aviation and 0.7 Mtoe in shipping. Some shipowners have voluntarily tested biofuels, driving the adoption of this practice.
B20/B30 blends are gaining ground in marines using key feedstocks like FAME (Fatty Acid Methyl Ester) and HVO Hydrotreated Vegetable Oil. However, the growth of the market is confronted with challenges, especially available sustainable feedstocks, competition, and logistical barriers. Biofuels offer potential for shipping, but expansion depends on policy support, supply chain improvements, and cost-effective sourcing.
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Source: LinkedIn
