During Week 34, the MABUX global bunker indices displayed a moderate downward trend. The 380 HSFO index dropped from $529.90 per metric ton (MT) to $523.21 per MT, while the VLSFO index decreased to $618.36 per MT. The MGO index experienced a more significant drop, marking a return below the $800 threshold. Despite these changes, the global bunker market showed no clear trend, with indices exhibiting unsustainable dynamics.
Scrubber Spread Movements and Regional Discrepancies
The MABUX Global Scrubber Spread (SS), which measures the price difference between 380 HSFO and VLSFO, recorded a moderate decrease, bringing it below the $100 breakeven point. Regional differences were notable: Rotterdam saw a narrowing of the SS Spread, while Singapore experienced a widening. These movements suggest continued irregular fluctuations in the coming week.
Impact of Geopolitical and Regional Factors on LNG and Gas Prices
Planned maintenance closures of Norwegian LNG terminals, along with supply concerns from conflicts in the Middle East and Ukraine, are expected to support natural gas and LNG prices in the short term. However, gas prices may stabilize in the medium to long term as new LNG terminals become operational. European gas storage levels continue to grow, with the benchmark TTF showing a moderate decline by the end of Week 34.
LNG Bunkering and Pricing Developments
The price of LNG as bunker fuel in the port of Sines fell by $62, with the price difference between LNG and conventional fuel narrowing. MGO LS prices also showed changes, influencing the cost dynamics in the port. For detailed insights, refer to the LNG Bunkering section.
MDI Index Trends: Underpricing Across Major Hubs
The MDI index, which measures the correlation between market bunker prices and the MABUX digital benchmark, continued to indicate underpricing for all types of bunker fuel across major global hubs. The 380 HSFO, VLSFO, and MGO LS segments all exhibited varying degrees of underpricing, with regional variations across Rotterdam, Singapore, Fujairah, and Houston. These trends are expected to persist into the next week.
HSFO and VLSFO Quality and Compliance Trends
Bureau Veritas reports that Q2 2024 statistics show a continued increase in the global viscosity of high sulfur fuel oil (HSFO), with a rise in sulfur content to its highest level since April 2023. The proportion of off-spec HSFO samples globally reached its lowest level since Q2 2022, with notable port-by-port variations in quality metrics. The viscosity of very low sulfur fuel oil (VLSFO) also continues to rise, indicating evolving trends in fuel quality and compliance.
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Source: LinkedIn India
