The Bunker Market Review was contributed by Marine Bunker Exchange (MABUX)
MABUX Viewpoint
Global Bunker Market remains in the same holding mode that has prevailed the last 3-4 weeks. The World Bunker Index MABUX showed slight upward evolution in the last 7 days. The 380 HSFO index rose from 306 to 309 USD/ MT (+3 USD), VLSFO added 4 USD: from 363 to 367 USD / MT, MGO also gained 3 USD: from 444 to 447 USD / MT. The price difference between 380 HSFOs and VLSFOs (the so-called Scrubber Spread (SS)) rose slightly by 1.47 USD and averaged USD 57.66 (56.19 USD a week before). Average SS Spread in Rotterdam has narrowed to 48.33 USD from 51.00 USD a week ago. In Singapore SS Spread has risen on the contrary to 67.00 USD from 60.67 USD.
Despite firm values of high sulfur fuel oil, medium sulfur fuel oil is still heading to the low sulfur fuel oil pool on account of lower conversion costs, adding to market glut. Medium sulfur fuel oil with sulfur content of around 1% can go into either VLSFO pool or HSFO pool, depending on the market. However, the interest is more towards the VLSFO pool versus the HSFO, as the cost of converting a lower value product to a higher value is much higher.
The US has emerged as the biggest importer of high sulfur fuel oil (HSFO) from the Baltic region. Last month some 46% of all HSFO leaving the Baltic Sea went to the US. HSFO is in high demand from refiners in the US seeking to process it through coking units. This has been one of the factors keeping the price spread between VLSFO and HSFO (SS) much narrower than expected this year.
