Marine Bunker Exchange (MABUX) global bunker indices continued a firm upward movement. The 380 HSFO index rose by US$25.18, from US$525.46/MT last week to US$550.64/MT. The VLSFO index added US$25.16. Also, the MGO index also gained US$50.10. “At the time of writing, the market was still in an uptrend,” commented a MABUX official.
The Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – was virtually unchanged, dropping only US$0.02.
The average weekly value, on the contrary, increased by US$6.30. In Rotterdam, SS Spread dropped another US$12 from US$67 last week to US$55, hitting November 2020 lows again.
The weekly average of SS Spread in Rotterdam also decreased by US$1.34. In Singapore, the price difference between 380 HSFO and VLSFO increased by US$2.
The weekly average also increased by US$6.83. At present, the SS Spread has stabilised at its current levels, remaining well below US$100 (SS breakeven) in the largest hubs.
Europe’s benchmark natural gas prices fell during the week as the heatwave across
southern Europe started to abate and gas inventories are high with storage sites on track to be full well in advance of EU targets. The European Union (EU) gas storage sites were 84% full as of 24 July.
EU has set a target to reach 90% full gas storage by 1 November 2023. “Not only will it hit that target ahead of schedule, but it could also fill its storage tanks to 100% by early
September,” pointed out a MABUX representative.
In the near term, Europe’s gas prices could rise due to the planned maintenance offshore Norway in August, which will include the massive Troll gas field, the Vesterled pipeline, and the Kollsnes gas processing plant.
The price of LNG as bunker fuel in the port of Sines (Portugal) continued to decline and
reached US$712/MT on 1 August. This marked a decrease of US$80 compared to the
previous week.
Consequently, the price difference between LNG and conventional fuel increased to US$198, favoring LNG. On the same day, MGO LS was quoted at US$910/MT
in the port of Sines.
During Week 31, the MDI index (the ratio of market bunker prices (MABUX MBP Index) and
the digital bunker standard MABUX (MABUX DBP Index)) registered some changes in the
undervalued trend and the transition of certain ports into the overvalued zone.
So, in the 380 HSFO segment, Rotterdam and Fujairah remained undervalued, while the average weekly MDI increased by 9 and 5 points, respectively. Meantime, Singapore and Houston moved into the overcharge zone, with the average weekly MDI rosing by 9 points in both ports.
For the VLSFO segment, all four selected ports were in the underestimation zone. The
average underpricing increased by 7 points in Rotterdam, 10 points in Singapore, and 7
points in Fujairah, but decreased by 8 points in Houston.
In the MGO LS segment, the MDI indicated a decline in average undercharge levels by 7
points in Rotterdam, 7 points in Singapore, and a significant 25 points in Fujairah. However,
Houston experienced an 8-point increase in the average undercharge level.
“We expect that the global bunker indexes are likely to continue their upward movement
in the upcoming week, ” commented Sergey Ivanov, director of MABUX.
