Global bunker indices still in downward trend

During the 31st week of the year, the Marine Bunker Exchange (MABUX) indices continued their downward trend.

The 380 HSFO index dropped by US$9.30 to US$531.05/MT, approaching the US$500 mark. The VLSFO index fell by US$10.88 to US$630.92/MT. The MGO index decreased by US$13.61 to US$810.08/MT, nearing the US$800 mark.

“At the time of writing, the global bunker indices showed signs of a moderate upward reversal,” noted a MABUX official.

The MABUX Global Scrubber Spread (SS), which reflects the price difference between 380 HSFO and VLSFO, saw a slight decrease of US$1.58 dropping to US$99.87, once again dipping below the US$100 mark. The weekly average also fell slightly by US$0.38.

In Rotterdam, the SS Spread increased by US$10, rising from US$64 to US$74, with the weekly average up by US$0.33.

In Singapore, the 380 HSFO/VLSFO spread grew by US$4, from US$107 to US$111, staying above the US$100 mark. The weekly average in Singapore widened by US$4.50.

“Currently, there is no clear trend in the dynamics of the Global SS Spread and SS indices across ports,” pointed out a MABUX representative.

Recent developments in LNG supply and European prices highlight the sensitivity of Europe’s benchmark prices to supply disruptions. As of 15 July, Europe’s natural gas storage is already 82.5% full.

Given the current supply and demand conditions, the EU is on track to fill its storage sites well before the winter heating season. In week 31, the European gas benchmark TTF saw a modest increase, rising by 2.739 EUR/MWh to reach 34.361 EUR/MWh, up from 31.622 EUR/MWh the previous week.

In the port of Sines (Portugal), the price of LNG as a bunker fuel rose by an additional US$13 over the week, reaching US$754/MT as of 29 July. Meanwhile, the price difference between LNG and conventional fuel narrowed to US$46 in favour of LNG, down from US$75 the previous week. On the same day, MGO LS was priced at US$800/MT in the port of Sines.

In Week 31 of 2024, the MDI index (which measures the correlation between market bunker prices, as tracked by the MABUX MBP Index, and the MABUX digital bunker benchmark, or MABUX DBP Index) showed the following trends across the world’s four largest hubs—Rotterdam, Singapore, Fujairah, and Houston:

– 380 HSFO Segment: All four ports continued to experience undercharging. Weekly averages decreased by 4 basis points (bps) in Rotterdam, 6 bps in Singapore, and 10 bps in Houston, while Fujairah saw an increase of 7 bps.

– VLSFO Segment: All four ports were undervalued, with weekly averages dropping by 6 bps in Rotterdam, 13 bps in Singapore, 7 bps in Fujairah, and 3 bps in Houston. The MDI indices for both Singapore and Fujairah approached the 100% correlation mark with the MABUX digital benchmark.

– MGO LS Segment: In Houston, the MDI index reached a 100% correlation with the MABUX digital benchmark, despite a decrease of 5 bps. The other three ports remained undervalued, with weekly averages dropping by 2 points in Singapore and Fujairah, while the index in Rotterdam stayed the same. Rotterdam and Singapore’s indices remained close to the US$100 mark.

“Over the week, the balance of overvalued/undervalued ports swung again towardsundervaluation. We expect the underpricing trend for all types of bunker fuel to continuenext week,” stated a MABUX official.