MABUX: Bunker Weekly Outlook, Week 02, 2022
The Weekly Outlook was contributed by Marine Bunker Exchange (MABUX)
On a Week 02, the MABUX World Bunker Index continued to grow steadily, continuing the upward trend started from the first week of the new year. Index 380 HSFO rose by 19.37 USD: from 504.92 USD / MT to 524.29 USD / MT. The VLSFO index surged by 21.11 USD: from 641.20 USD / MT to 662.21 USD / MT, while the MGO index added 25.79 USD (from 756.44 USD / MT to 782.23 USD / MT). The VLSFO and MGO LS indices for 380 HSFO have already exceeded the highs of October 2021 (VLSFO - 657.89 USD / MT on 26.10; and MGO LS - 779.20 USD / MT on 27.10).
The weekly average Global Scrubber Spread (SS) - the difference in price between 380 HSFO and VLSFO - showed a moderate decline of $ 2.33 during the week ($ 134.58 versus $ 136.91 last week). At the same time, SS Spread in Rotterdam increased slightly from $ 120.00 to $ 124.83 (plus $ 4.83 compared to the previous week). On the contrary, the average weekly SS Spread in Singapore fell by $ 3.83 to $ 183.00 from $ 186.83 last week. SS Spread indicators in the major hubs are still above the psychological $ 100 mark. More information is available in the "Price Difference" section of the website www.mabux.com.
A flotilla of liquefied natural gas (LNG) from the US has finally arrived in Europe, increasing LNG imports to Europe to a two-year high. Fresh supplies of LNG are helping to ease supply problems, but stockpiles are still at very low levels for this time of year. The price of LNG as marine fuel at the port of Sines (Portugal) on January 10 decreased by 39 USD to 2397 USD / MT, nevertheless more than three times higher than the price of MGO LS (762 USD / MT as of January 11).
On a Week 02, the MABUX MBP Index (Market Bunker Prices) vs. MABUX DBP Index (MABUX Digital Bunker Benchmark) correlation showed that 380 HSFO fuel grade was overpriced in three out of four major ports selected: Rotterdam - plus $ 3, Fujairah - plus $ 2 and Houston - plus $ 12. The only port where the MABUX MBP / DBP Index registered an underestimation of the 380 HSFO is Singapore - minus $ 13. 380 HSFO Index fluctuations are close enough to the 100% correlation point.
VLSFO fuel grade, according to the MABUX MBP / DBP Index, remained overpriced in all selected ports: plus $ 6 in Rotterdam, plus $ 49 in Singapore, plus $ 41 in Fujairah and plus $ 1 in Houston. Meanwhile, the VLSFO overcharge margins at all major ports are gradually decreasing.
As for the MGO LS, the MABUX MBP / DBP Index recorded an underestimation of this fuel grade in two of the four selected ports: in Rotterdam by minus $ 36 and in Singapore by minus $ 28. In Fujairah and Houston, the Index showed an overestimation of $ 15 and $ 2, respectively. Thus, the MABUX MBP / DBP Index for MGO LS does not yet have any firm trend so far.
In its first batch of allotments for 2022, China has reportedly issued 6.5 million tons of quotas for exporting low sulphur fuel oil (LSFO). This would be a 30% increase on the 5 million tons released in the first batch of 2021. As per Chinese officials, the LSFO export quotas hike ‘lends support to a further increase in Chinese production of the marine fuel’ and is also ‘a reflection of China's drive to establish itself into a bunker fuel hub in Northeast Asia’.
According to DNV statistics, there are now 251 LNG-fuelled vessels in operation and 403 on order. It is notable that orders are now building across a wider range of vessel segments. There are currently 28 LNG-fuelled container ships in operation and 98 on order, while 25 crude oil tankers are in service with an order book of 55 vessels. The order tally for car carriers is now 56, and for bulk carriers and cruise ships it is 49 and 26, respectively.
By Sergey Ivanov, Director, MABUX
