Despite expectations of upward correction after a sharp drop in bunker indices a week earlier, world bunker prices continued their downtrend over the Week 28, according to Sergey Ivanov, director of Marine Bunker Exchange (MABUX).
The 380 HSFO index fell by another US$23.43 to US$646.75 /mt. The VLSFO index, in turn, fell by US$38.02 to US$985.80 /mt. The MGO index also lost US$15.54 from US$1,286.05 /mt.
Following a further decline in fuel prices, the Global Scrubber Spread (SS) weekly average – the difference in price between 380 HSFO and VLSFO – also turned into a moderate downtrend over the week – minus US$6.38 (vs. US$348.90 last week). In Rotterdam, the average SS Spread, however, continued to rise: US$330.17 (vs. US$324.50 last week). In Singapore, the average weekly price difference of 380 HSFO/VLSFO has finally begun to decline: minus US$6.00 (vs. US$541.50 last week).
“Gazprom suspended the flow of gas along the Nord Stream 1 pipeline for regularly scheduled maintenance on Jul.11, which will last ten days. As a result, gas prices in Europe continued to grow,” noted Ivanov.
The price of LNG as bunker fuel in the port of Sines (Portugal) rose on 11 July by another US$224 and reached US$3380 /mt. LNG prices are still significantly higher than those of traditional bunker fuels: the price of MGO LS in the port of Sines was quoted on 11 July at US$1,371 /mt.
Over Week 28, the MDI index (comparison of MABUX MBP Index (market bunker prices) vs MABUX DBP Index (MABUX digital bunker benchmark)) registered an underestimation of 380 HSFO fuel in all four major ports selected: Rotterdam – minus US$92, Singapore – minus US$118, Fujairah – minus US$93. Houston also went over the underprice zone: minus US$17.
“Fuel underprice premium continues to widen in all ports,” continued Ivanov.
VLSFO fuel grade, according to MDI, remained, on the contrary, overpriced in all four selected ports: plus US$84 in Rotterdam, plus US$280 in Singapore, plus US$277 in Fujairah and plus US$69 in Houston. Here, the MDI index still does not have any firm trend: the overprice premium rose in Rotterdam, Singapore and Houston, but fell in Fujairah. VLSFO fuel is still the most overvalued segment in the global bunker market.
As for MGO LS grade, MDI registered an overestimation of this fuel only in two out of four selected ports: in Fujairah – plus US$220 and in Houston – plus US$69. Rotterdam and Singapore went into the underestimation zone: minus US$14 in both ports. MDI recorded a trend towards a gradual increase of the underprice premium and a reduction of the overpricing. The most significant change was Houston 43 points overcharge down and Singapore 43 points undercharge up.
“We expect a slight downward trend to continue in the global bunker market next week,” concluded Ivanov.
