- VLSFO prices are up, driven by higher Brent crude prices and geopolitical tensions.
- Biofuel blends have also seen price hikes, influenced by rising costs of components and regional market dynamics.
- LNG prices in Rotterdam have remained stable, while Singapore has seen an increase due to higher demand in Asia.
Despite these trends, HSFO remains the most cost-effective option for scrubber-fitted ships, and fossil LNG continues to be a cheaper alternative to bio-blended VLSFO, especially when considering EU ETS costs, reports Engine.
VLSFO Prices Surge
- Rotterdam and Singapore: VLSFO benchmarks have increased by $19/mt in Rotterdam and $16/mt in Singapore over the past week.
- Impact of Brent Crude: The rise in front-month ICE Brent futures, driven by Middle Eastern geopolitical tensions, has supported this upward trend.
- Price Comparisons:
- Rotterdam’s VLSFO shifted from a $13/mt discount to LNG to a $6/mt premium.
- Including estimated EU Allowance (EUA) costs for intra-EU voyages, LNG is now $12/mt cheaper than VLSFO in Rotterdam.
- Bio-blended B24-VLSFO has become $21/mt more expensive relative to LNG, now standing at a $180/mt premium.
Biofuels Market Dynamics
- Price Increases: Biofuel bunker blend prices in Rotterdam and other ARA ports rose by $20-21/mt, influenced by rising costs for both conventional and bio components.
- Regional Variations:
- UCOME-based B24-VLSFO in Gibraltar and Algeciras increased by $19/mt, widening its premium over Singapore’s equivalent to $67/mt.
- Singapore’s B24-VLSFO gained $13/mt but remains less competitive compared to ARA prices.
- Market Transactions: A B24-VLSFO deal in Singapore was reported at $729/mt, lower than another market indication of $745/mt.
LNG Pricing and Market Stability
- Rotterdam: The VLSFO-equivalent LNG bunker price held steady at $568/mt, reflecting a slight drop in the Dutch TTF Natural Gas benchmark.
- Singapore: LNG bunker prices rose by $7/mt, driven by increased demand in key Asian markets, potentially tightening supply and pushing prices upward.
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Source: Engine
