MABUX: Bunker Weekly Outlook, Week 40, 2022

The Weekly Outlook was contributed by Marine Bunker Exchange (MABUX)

Over the Week 40, MABUX global bunker indices turned to upward evolution. The 380 HSFO index increased by 7.14 USD: from 495.41USD/MT last week to 502.55 USD/MT. The VLSFO index, in turn, rose by 38.46 USD: from 747.92 USD/MT to 786.38 USD/MT. The MGO index added 69.21 USD (from 1074.89 USD/MT to 1144.10 USD/MT).

The Global Scrubber Spread (SS) weekly average - the price differential between 380 HSFO and VLSFO –increased over the Week 40 - plus $6.98 ($265.19 vs. $258.21 last week). In Rotterdam, the average SS Spread continued to decline: $203.17 vs. $214.33 (down $11.16). In Singapore, the average weekly price differential of 380 HSFO/VLSFO contrariwise, increased – by plus $10.17 ($294.50 vs. $284.33 last week). The indicators of the Global SS Spread and the values of SS Spread in the largest hubs spread out from each other. More information is available in the Price Differences section of mabux.com.

The European Commission is considering versions of a gas price cap including a possible temporary "flexible" limit on the Dutch Title Transfer Facility price, the EU's head of energy policy said on Tuesday. Such a measure would be temporary, while the EU works on an alternative price index to the TTF. A broad price cap on wholesale gas prices comes with risks, and any market intervention would need to be coupled with measures to ensure gas demand did not rise as a result.
Price for LNG as a bunker fuel at the port of Sines (Portugal) increased on Oct 03 by 460.00 USD/MT to 3051.00 USD/MT (versus 2591.00 USD/MT a week earlier). Spread between LNG price and price for MGO is wider again: LNG prices are more, than 2.5 times higher than the most expensive type of traditional bunker fuel: the price of MGO LS at the port of Sines was quoted on Oct 05 at 1149.00 USD/MT.

Over the Week 40, the MDI index (comparison of MABUX MBP Index (market bunker prices) vs MABUX DBP Index (MABUX digital bunker benchmark)) showed an underpricing of 380 HSFO fuel grade in all four selected ports. The underestimation margins increased during the week in all ports except of Rotterdam, where the underpricing stayed at the same level of minus $91. In other ports underestimation amounted for: Singapore - minus $147, Fujairah - minus $145 and Houston - minus $79.

VLSFO fuel grade, according to MDI, remained, overpriced in three out of four selected ports: minus $5 in Rotterdam, plus $57 in Singapore, plus $63 in Fujairah and plus $20 in Houston. In this fuel segment, the MDI index still does not have any firm dynamics: MDI level is up in half of selected port.

In the MGO LS segment, MDI registered underpricing in three ports out of four selected over the Week 40: Rotterdam – minus $84, in Singapore – minus $125, and Houston – minus $17. MGO LS fuel remained overvalued in Fujairah - plus $ 143. MDI level decreased for all selected ports.

Work is to begin on the decarbonisation of the shipping corridor between Halifax, on Canada’s east coast, and Hamburg, along Germany’s northwest coast, with a focus on the development of a supply chain for green hydrogen and port infrastructure for bunkering. A Memorandum of Understanding between the two ports was signed in Hamburg on 29 September. One of the intentions of the agreement is to encourage collaboration between value chain partners, shipping lines and other interests to advance the use of green energy on the corridor. Green hydrogen would be exported from Halifax to Hamburg and the partners says they will work towards creating ‘favourable conditions for decarbonisation’, including by ‘lobbying for aligned regulatory measures, financial incentives, and safety regulations, as well as working with local communities.’

High volatility still prevails on the global bunker market. We expect that irregular changes to continue during the next week.

By Anastasia Pervova, Marketing analytic, MABUX