MABUX: Bunker prices could trend further down next week

In week 47, MABUX global bunker indices showed a firm downtrend. The 380 HSFO Index fell $17.52: from $522.11/MT last week to $504.59/MT, approaching the psychological $500 mark. The VLSFO index, in turn, fell $39.57 ($722.45/MT vs. $762.02/MT last week). The MGO index also shed $41.16 (to $1088.38/MT from $1129.54/MT last week), breaking the $1100 mark for the first time since Oct. 3.

Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – continued its firm decline into week 47 – minus $22.05 ($217.86 vs $239.91 last week) and approaching $200. In Rotterdam, the SS Spread showed a more even reduction – down $30.00 to $170.00 from $200.00 last week. In Singapore, the 380 HSFO/VLSFO price differential has narrowed by $20.00 ($230.00 versus $250.00 last week). We expect the decline in SS spreads to continue next week. You can find more information in the Differentials section on mabux.com.

Natural gas prices in Europe continued their upward trend this week. The price of LNG as bunker fuel in the port of Sines (Portugal) rose to 1806 USD/MT on November 21 (up 90 USD compared to the previous week). With this, the price of LNG exceeds the cost of the most expensive traditional bunker fuel by 729 USD: on November 21, the price of MGO LS in the port of Sines was quoted at 1077 USD/MT.

In week 47, the MDI (Comparison of MABUX Market Bunker Prices (MBP Index) to MABUX Digital Bunker Benchmark (DBP Index)) continued to record an underestimate of 380 HSFO fuel in all four selected ports. Sub-price ranges narrowed slightly, showing: in Rotterdam – minus $117, Singapore – minus $120, Fujairah – minus $180 and in Houston – minus $73.

In the VLSFO segment, Houston returned to the underpricing zone, according to MDI, joining Rotterdam and Fujairah: down $10, down $63, and down $5, respectively. Singapore remains the only overvalued port – up $8. The under-premium has increased and the over-valuation has decreased.

In the MGO LS segment, MDI registered fuel underpricing in two out of four selected ports: Rotterdam – minus $55 and Houston – minus $108. Singapore and Fujairah stayed in the overpriced zone: up $42 and up $167, respectively. MDI has not had a sustained trend in this bunker fuel segment.

A new Global Maritime Forum report on developing green shipping corridors has found that “activities in 2022 have exceeded expectations” – but calls for “the involvement of some key industry stakeholders, particularly cargo owners and fuel producers, as soon as possible.” must possible’. The report also argued that policy support from national governments “must meet the challenge of closing the fuel cost gap between zero-emission and fossil fuels. 24 countries express their support for the creation of green shipping corridors to demonstrate and deploy the zero-emission solutions needed for shipping’s transition to zero greenhouse gas emissions. The report noted that there has been an encouraging level of activity this year with more than 20 initiatives and 110 stakeholders across all major shipping segments – but added that most of these initiatives are still in the “very early stages of development” with a handful achieved so far the feasibility and planning phase. In addition, the report warned that the Maritime Green Corridors to date have tended to be “too shipping-centric” and therefore more needs to be done to “engage freight owners and producers of future fuels”. Previous analysis has shown that 5% of the fuels used on deep sea routes would need to be scalable, zero-emission fuels such as clean ammonia, methanol or hydrogen for shipping to take off.

Global bunker indices could trend lower next week ahead of sanctions on December 5 against Russian oil product exports to Europe.
Source: By Sergey Ivanov, Director, MABUX

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