- Rotterdam’s B24-VLSFO HBE and LNG prices have moved closer, with LNG now only slightly cheaper.
- EU Emission Allowance (EUA) costs narrow the price difference between these fuels further.
- Vessels using bio-blends between EU ports could see a significant compliance surplus under the upcoming FuelEU Maritime standards.
- Rising Dutch TTF gas prices and reduced wind power are driving up LNG prices, while Singapore’s LNG prices have declined amid high stock levels.
According to Engine, recent shifts in Rotterdam’s bunker fuel prices reflect evolving dynamics between LNG and biofuel options, especially as the European Union’s emissions regulations bring compliance costs into sharper focus. The B24-VLSFO HBE price in Rotterdam dropped by $27/mt this past week, while LNG rose by $20/mt, bringing the two fuels into closer price alignment. Without EUA costs, Rotterdam’s LNG is $15/mt cheaper than B24-VLSFO HBE; with EUA costs included, LNG is only $4-10/mt cheaper.
VLSFO Prices
Rotterdam’s B24-VLSFO HBE price dropped sharply, contrasting with a slight increase of $3/mt for Singapore’s VLSFO benchmark. Rotterdam’s VLSFO benchmark remained stable with only a $3/mt decrease. Singapore’s VLSFO availability has improved, reducing lead times, while in Rotterdam, prompt availability remains limited.
LNG vs. B24-VLSFO HBE
Rotterdam’s rising LNG price has brought it within $15/mt of B24-VLSFO HBE. For dual-fuel vessels, LSMGO has now become cheaper than LNG, which went from a $2/mt discount to a $13/mt premium. VLSFO remains the most cost-effective fuel, priced $130/mt below LNG.
Biofuel Market
Biofuel prices showed mixed trends, with B24-VLSFO HBE and B24-LSMGO HBE in Rotterdam declining by $27/mt and $19/mt, respectively. The HBE A ticket price rose to €14.90/GJ, providing a higher rebate for B30-VLSFO blends in Dutch ports. In Singapore, B24-VLSFO UCOME rose by $3/mt, while B24-LSMGO UCOME fell by $9/mt due to lower LSMGO prices. A rise in Chinese UCOME, a significant biofuel feedstock for Singapore, could add upward pressure on prices.
Drivers Behind LNG Price Increase
The rise in Rotterdam’s LNG price is attributed to increased Dutch TTF Natural Gas prices, driven by heightened gas demand, lower wind power generation, and storage drawdowns across Europe. Conversely, Singapore’s LNG price dipped due to high stock levels and decreased spot demand.
Compliance Surplus and Future Implications
Under FuelEU Maritime regulations, vessels using B24-VLSFO between EU ports will be well below next year’s GHG intensity targets, resulting in a $102/mt compliance surplus. This surplus, transferable to other VLSFO-consuming vessels, offers economic benefits to shipowners seeking compliance within the EU.
This evolving market reflects how emission regulations, alternative fuel options, and biofuel incentives are reshaping fuel choices for the maritime industry across different regions.
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Source: Engine
