In the 44th week of the year, the Marine Bunker Exchange (MABUX) indices saw a general decline across all segments.
The 380 HSFO index dropped by US$10.90 to US$528.49/MT, the VLSFO index decreased by US$18.90, falling below the US$600 threshold to US$596.21/MT, and the MGO index declined by US$20.55 to US$749.50/MT.
“At the time of writing, the global bunker indices were experiencing a moderate upward correction,” stated a MABUX official.
The MABUX Global Scrubber Spread (SS), the price difference between 380 HSFO and VLSFO, continued to narrow by US$8 to US$67.72, maintaining a position well below the breakeven mark of US$100. The weekly SS Spread average fell by US$6.26.
In Rotterdam, the SS Spread saw a sharp drop of US$26, decreasing to US$22. This marks the lowest point since IMO 2020 regulations were implemented on 1 January 2020, with the weekly average also dropping by US$25.66.
In Singapore, the 380 HSFO/VLSFO differential narrowed by US$6 to US$98 from US$104 last week, breaking the US$100 level, with the weekly average decreasing by US$8.33. This narrowing trend in the SS Spread is affecting the economic viability of the 380 HSFO + scrubber option, and a continued narrowing is expected next week.
Natural gas prices in Europe rose in the second and third quarters of 2024, though they remained slightly lower and less volatile than in 2023. Increased Norwegian supply, robust storage levels, and low European demand helped counterbalance pressures from a constrained global LNG market impacted by rising global gas demand and geopolitical tensions.
By October 28, Europe’s storage facilities were 95.32% full, having met the 90% storage goal in August, well ahead of the November 1 deadline. By the close of Week 44, the European TTF gas benchmark increased by €2.165/MWh to €42.869/MWh, up from €40.704/MWh last week.
The price of LNG as a bunker fuel in Sines (Portugal) surged by US$81, reaching US$948/MT on 29 October. The price gap between LNG and conventional fuels on October 29 also widened, with MGO LS priced at US$719/MT—US$229 less than LNG, compared to a US$154 differential the prior week.
Throughout Week 44, the MDI index (correlating market bunker prices, or MABUX MBP Index, with the MABUX digital bunker benchmark, MABUX DBP Index) showed the following patterns across major hubs: Rotterdam, Singapore, Fujairah, and Houston:
- 380 HSFO Segment: Singapore and Houston entered the overcharge zone, joining Rotterdam. The weekly overprice average increased by 17 points in Rotterdam, 10 points in Singapore, and 12 points in Houston. Singapore’s MDI index neared a 100% correlation with the MABUX digital benchmark, while Fujairah remained undervalued with a 9-point drop in its weekly average.
- VLSFO Segment: Singapore and Fujairah stayed in the overcharge zone, with weekly averages rising by 3 points in Singapore and declining by 2 in Fujairah. Rotterdam and Houston continued as undervalued, with weekly averages increasing by 8 and 2 points, respectively.
- MGO LS Segment: All four ports remained undervalued. Weekly averages showed a further 6-point decline in Rotterdam and a 1-point decline in Singapore, but a gain of 3 points in Fujairah and 9 in Houston.
At the week’s end, the balance of overvalued versus undervalued ports shifted towards overvalued in the 380 HSFO segment, although the overall trend of undervaluation persists across the global bunker market.
Meanwhile, the Port of Rotterdam reported a total throughput of 328.6 million tonnes for the first three quarters of this year, reflecting a slight 0.4% decrease from 2023. Container throughput was strong, rising 3% year-over-year to 101.1 million tonnes in Q3, attributed to increased consumer spending in Europe.
Conversely, liquid bulk throughput fell by 1.7% over the first nine months, with crude oil declining by 3.6% due to unexpected maintenance at a German refinery and low refinery margins. LNG throughput dropped just below last year’s 300,000 tonnes, as high European natural gas reserves lessened demand, and spot LNG cargoes were increasingly directed to Asia, where prices were slightly higher.
Additionally, biofuel throughput declined significantly. The Port Authority noted that increased consumer confidence spurred growth in container throughput, but other segments continued to struggle amid challenges in the European industry, hindered by high energy costs.
“Despite this week’s drop in bunker prices, we expect that an upward correction will
prevail in the global bunker market next week,” pointed out Sergey Ivanov, Director at MABUX.
