According to the weekly outlook of Marine Bunker Exchange (MABUX) for fuel prices, the global bunker market has been in a state of high volatility throughout 2022.
MABUX noted a spike in bunker fuel prices in March 2022, triggered by the outbreak of the war in Ukraine, which continued until the end of June. Since the beginning of July, fuel prices have been in a stage of a downward correction.
As a result, the MABUX 380 HSFO Global Index decreased by US$12.71 compared to the beginning of the year while the MABUX VLSFO Global Index rose by US$46.86. The most significant change was registered for the MABUX MGO LS Global Index, which increased by US$282.54.
“We expect the trend towards a further downward correction to continue in early 2023,” commented a MABUX official.
As for the dynamics of bunker prices in 2022, global 380 HSFO bunker indices decreased by an average of 13% (only South America recorded a moderate growth). There were irregular changes for VLSFO: prices decreased in Northern and Southern Europe, Asia/Oceania and Africa/Middle East but increased in North, Central and South America.
Prices for MGO LS soared in all regions worldwide by an average of 20.9%. Prices for 380 HSFOs decreased at the highest rates in Asia/Oceania (-29.3%), for VLSFO – in Northern Europe (-12.0%). On the contrary, the highest growth rate for MGO LS was registered in South America (25.8%).
Over Week 52, MABUX global bunker indices continued sustainable growth. The 380 HSFO index rose by US$25.48 to US$491.17/MT. The VLSFO index added US$24.47, reaching US$663.08/MT. The MGO index showed the largest increase by US$39.82, climbing to US$1,037.40/MT.
Global Scrubber Spread (SS) – the price difference between 380 HSFO and VLSFO – widened over Week 52 to US$223.14. However, SS Spread in Rotterdam dropped by US$10 to US$155. In Singapore, the price difference of 380 HSFO/VLSFO also showed a decrease of US$18 to US$207.
“We expect SS Spread does not have any significant changes next week due to the New Year holidays,” pointed out a MABUX representative.
Additionally, the price of LNG as bunker fuel in the port of Sines in Portugal continued to decline and reached US$1,651/MT as of 27 December, according to the MABUX report.
Thus, the LNG price has significantly approached the cost of traditional bunker fuel grade, on 27 December the price of MGO LS at the port of Sines was quoted at US$1,014/MT.
Over Week 52, the MDI index (comparison of MABUX market bunker prices (MBP Index) vs MABUX digital bunker benchmark (DBP Index)) still registered underestimation of 380 HSFO fuel at all four selected ports. Underestimation levels slightly decreased in all ports and amounted to the following:
- Rotterdam – minus US$118
- Singapore – minus US$114
- Fujairah – minus US$158
- Houston – minus US$71.
In the VLSFO segment, according to MDI, Singapore and Fujairah remained slightly overvalued. The overcharge decreased and amounted to plus US$12 and plus US$17, respectively. In Rotterdam and Houston, on the contrary, this fuel grade was underestimated by an average of minus US$66 and minus US$36, respectively.
In the MGO LS segment, Fujairah remains the only overvalued port, plus US$150. In all other ports, the MDI index registered an underpricing of MGO LS, Rotterdam – minus US$74, Singapore – minus US$33 and Houston – minus US$76. Undercharge margins increased, and overcharge has not changed.
“We still do not expect drastic changes of bunker indices during the New Year holidays. Irregular fluctuations will remain the prevailing trend in the Global Bunker Market next week” commented Sergey Ivanov, director of MABUX.
