MABUX: Bunker Weekly Outlook, Week 10, 2022
Contributed by Marine Bunker Exchange (MABUX)
The military conflict in Ukraine pushed bunker prices to record levels on a Week 10. The 380 HSFO Index rose by 106.79 USD: from 659.89 USD/MT to 765.93 USD/MT. The VLSFO Index jumped by 177.34 USD: from 760.73 USD/MT to 1038.07 USD/MT. The MGO index showed the most significant growth: by 289.34 USD (from 982.65 USD/MT to 1271.99 USD/MT). Bunker indices continue rising amid high volatility.
The Global Scrubber Spread (SS) weekly average - the difference in price between 380 HSFO and VLSFO - also showed a sharp increase over the week: plus $62.00 ($237.91 vs. $175.91 last week). On March 09, Global SS Spread updated the absolute record held since January 09, 2020 and showed $272.14 (the previous record was $270.00). In Rotterdam, the SS Spread weekly average rose from $177.00 to $222.17 (up $45.17 from last week). On March 09, SS Spread in Rotterdam came close to the absolute record mark ($ 290.00 as of January 01, 2020) and showed $ 289.00. In Singapore, the average SS Spread also continued to grow: plus $56.33 from $225.50 to $278.83 (the absolute record is $347.00 as of January 09, 2020). More information is available in the Price Differences section of mabux.com.
Gas prices in Europe remain at record levels amid escalating geopolitical risks. LNG as a bunker fuel is still not listed.
Over the Week 10, the average correlation of MABUX MBP Index (market bunker prices) vs MABUX DBP Index (MABUX digital bunker benchmark) showed that 380 HSFO fuel remained overpriced at two out of four ports selected: in Rotterdam - plus $12 and in Houston - plus $24. In Singapore and Fujairah, the MABUX MBP/DBP Index registered 380 HSFO’s underpricing by $24 and $16, respectively. Despite the high market volatility, the MABUX MBP/DBP Index for 380 HSFO fuel had no significant changes: the market and digital indices were fairly close.
VLSFO fuel grade, according to the MABUX MBP/DBP Index, remains overpriced in all selected ports: plus $50 in Rotterdam, plus $51 in Singapore, plus $81 in Fujairah and plus $7 in Houston. The most weekly significant was the reduction of VLSFO’s overcharge margin at the port of Houston by 31 points.
As for MGO LS, the MABUX MBP/DBP Index recorded an underpricing of this fuel grade in three of the four selected ports: Fujairah returned to the undercharge zone: minus $ 114. In Rotterdam and Singapore, MGO LS was undervalued by $ 9 and $ 166, respectively. The only overpriced port, according to the MABUX MBP/DBP Index, was Houston - plus $ 24. The most significant change was a sharp increase of the underprice ratio at Singapore by 101 points at once.
DNV registered orders for 16 LNG-fuelled vessels in February, with the growth driven by the container and car carrier segments. There are now 710 vessels in operation or on order (269 in operation and 441 on order). The ordering activity was highlighted last month by Zodiac Maritime, Eastern Pacific Shipping, H-Line, CLdN, Mitsui O.S.K. Lines and Tiger group. Seaspan also added to global LNG bunkering capacity with its order for two bunker vessels. As previously reported, 2021 was a record year for LNG-fuelled vessel orders, with a final tally of 240 ships.
The military conflict escalation in Ukraine continues to be the main upward driver in the global bunker market. We expect bunker prices to continue soaring next week.
By Sergey Ivanov, Director, MABUX
