During the 50th week, the MABUX global bunker indices showed a moderate decline. The 380 HSFO index fell by USD 4.76: from USD 515.07/MT last week to USD 510.31/MT, gradually approaching the USD 500.00 mark. The VLSFO index decreased by USD 3.98 (USD 588.94/MT versus USD 584.96/MT last week). Similarly, the MGO index dropped by USD 5.20 (from USD 751.95/MT last week to USD 746.75/MT). At the time of writing, no clear trend was observed in the global bunker market, with indices exhibiting mixed movements.
MABUX Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – recorded a slight increase of $0.78 (from $73.87 last week to $74.65), still staying well below the SS breakeven mark of $100.00. The index weekly average, on the contrary, decreased by $1.23. In Rotterdam, the SS Spread saw a sharp increase of USD 14.00 ($56.00 versus $42.00 last week), and the weekly average in the port dropped by $2.83. In Singapore, the price gap of 380 HSFO/VLSFO widened by $2.00: from $85.00 last week to $87.00. The weekly average in the port added $7.83. Thus, during the week, the SS Spread stayed below USD 100.00 and showed no consistent directional trend. We expect the irregular changes in SS Spread to persist next week.
Natural gas withdrawals from storage in Europe are occurring at their fastest pace in six years, driven by persistent winter weather and low temperatures, which have hindered efforts to reduce reliance on hydrocarbons. Since the start of the official winter season on October 1, gas storage levels in the EU and UK have decreased by 83 terawatt hours. This marks the fastest withdrawal rate since 2016 and is more than four times the average for the past decade. Despite the sharp decline, storage levels are still considered comfortable but are notably lower than during the last two winters. As of December 09, European regional storage facilities were 81.54% full (down 3.08% from last week), and gas extraction continues. At the end of week 50, the European gas benchmark TTF showed a moderate decline: minus 3.005 Euros/MWh (45.552 euros/MWh versus 48.557 Euros/MWh last week).
The price of LNG as a bunker fuel at the port of Sines (Portugal) dropped by USD 43 over the week, reaching USD 965/MT on December 10, breaking below the USD 1,000/MT mark. Meanwhile, the price gap between LNG and conventional fuel also narrowed: USD 248 in favor of MGO LS, compared to USD 270 the previous week. On December 10, MGO LS was priced at USD 717/MT in the port of Sines.
During Week 50, the MABUX Market Differential Index (MDI) (the ratio of market bunker prices (MBP Index) to the MABUX digital bunker benchmark (DBP Index)) registered underpricing across all bunker fuel types in major hubs: Rotterdam, Singapore, Fujairah and Houston:
- 380 HSFO segment: Weekly average underpricing fell another 1 point in Rotterdam, but rose by 8 points in Singapore, Fujairah, and Houston. The MDI in Rotterdam remained close to 100 percent correlation mark between the market price and the MABUX digital benchmark.
- VLSFO segment: Weekly underpricing increased by 2 points in Rotterdam and 6 points in Fujairah and Houston but decreased by 6 points in Houston. The MDI in Singapore unchanged and remained near the 100% correlation mark of MBP and DBP.
- MGO LS segment: Weekly average undervaluation widened by 2 points in Rotterdam, 5 points in Singapore, and 4 points in Houston, while narrowing by 8 points in Fujairah. The MDI index in Singapore fell below the $100.00 mark, while Rotterdam stayed above it.
The balance of overvalued/undervalued ports remained largely unchanged during the week. Bunker fuel undervaluation recorded across all ports. This trend is likely to continue next week.
DNV statistics reveal a slight slowdown in the pace of new orders for alternative fuel ships in November 2024, with 27 new ships ordered, down from the record levels in October. Despite this dip, the overall trend for 2024 remains stable. LNG continues to dominate, accounting for 23 of the new orders, with 15 being container ships and six car carriers. Additionally, four orders were placed for ammonia-fuelled ships, while no new orders were reported for LPG, methanol, or hydrogen-fuelled ships. Although November saw a decline in alternative fuel ship orders compared to October’s record levels, LNG remains the leading choice among alternative bunker fuels, driven largely by demand in the container ship segment. Year-on-year data highlights robust growth, with LNG-fuelled ship orders up 119% and methanol-fuelled ship orders up 7%.
We expect the global bunker market to see a moderate upward correction next week, although multidirectional fluctuations across bunker indices will likely continue.
Source: By Sergey Ivanov, Director, MABUX
