Excessive volatility within the bunker market, brought on by the continuing navy battle in Ukraine, prevents the formation of a sustainable pattern in gasoline indices. Over the Week 15, MABUX Bunker Index confirmed reasonable irregular adjustments. The 380 HSFO index fell by 5.82 USD: from 718.82 USD/MT to 713.00 USD/MT. The VLSFO index fell extra considerably – by 26.09 USD: from 946.57 USD/MT to 920.48 USD/MT. The MGO index, in flip, rose by 18.19 USD (from 1159.26 USD/MT to 1177.45 USD/MT).
The International Scrubber Unfold (SS) weekly common – the worth distinction between 380 HSFO and VLSFO – started a reasonable decline over the week – minus $ 6.81 ($ 215.32 versus $ 222.13 final week). On the identical time, in Rotterdam, the typical SS Unfold, quite the opposite, barely elevated from $207.67 to $208.83 (plus $1.16). It’s noteworthy, that the sharp decline in 380 HSFO/VLSFO worth distinction on the port of Singapore continued: the typical ratio decreased by $32.67 (from $180.00 to $147.33), and in absolute worth the SS Unfold fell to $138.00 as of April 13. Extra data is on the market within the Worth Variations part on mabux.com.
After greater than every week of consecutive declines, Europe’s benchmark pure gasoline costs started to rise once more amid decrease orders for Russian gasoline provide transiting Ukraine. Europe can be trying to enhance its imports of liquefied pure gasoline (LNG), and varied international locations, together with main economies depending on Russian gasoline similar to Italy and Germany, have been in talks with exporters, together with the US and Qatar, for extra LNG provide, if potential. LNG as a bunker gasoline continues to be not listed.
Over the Week 15, the typical correlation of MABUX MBP Index (market bunker costs) vs MABUX DBP Index (MABUX digital bunker benchmark) confirmed that each one main bunker fuels are within the zone of great overpricing in all chosen ports amid continued excessive volatility. Thus, 380 HSFO gasoline’s overcharge margins on the finish of the week had been registered as: in Rotterdam – plus $ 69 (plus $ 63 in comparison with final week), in Singapore – plus $ 98 (plus $ 48), in Fujairah – plus $ 91 (plus $ 51) and in Houston, plus $89 (plus $68). The overcharge ranges continued to develop with highs in Singapore – plus 50 factors, and in Fujairah – plus 40 factors.
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VLSFO gasoline grade, in line with MABUX MBP/DBP Index, was additionally overpriced in all chosen ports: plus $119 (plus $101 final week) in Rotterdam, plus $71 (plus $42) in Singapore, plus $86 (plus $68) in Fujairah and plus $ 127 (plus $106) in Houston. The tempo of progress of overcharge margins within the VLSFO section is considerably behind that of 380 HSFO.
As for MGO LS, MABUX MBP/DBP Index additionally recorded an overpricing over the week in all 4 chosen ports: Rotterdam – plus $ 80 (plus $ 24 the week earlier than), Singapore – plus $ 30 (minus $ 8), Fujairah – plus $112 (plus $87) and Houston – plus $146 (plus $107). Overcharge ratio on this section of gasoline additionally continued to develop.
Analysis carried out by the consultancy Blue Perception signifies that in 2021 the apply of brief very low sulphur gasoline oil (VLSFO) deliveries price homeowners and charterers round $100 million in Fujairah and $150 million in Rotterdam. The info collected by Blue Perception means that ‘a major quantity’ of deliveries in these bunker hubs are being made beneath monetary breakeven, which signifies the persevering with apply of supply shortfalls. Proof for the report’s conclusions is claimed to have been offered by enter from suppliers, consumers and surveyors in Rotterdam and Fujairah. Whereas the ‘prices’ of brief supply had been based mostly on the supply economics of VLSFO, the analysis is claimed to assist comparable patterns of losses for prime sulphur gasoline oil (HSFO) and even larger losses for marine gasoil (MGO). In accordance with Blue Perception, the report’s findings ought to present impetus for a extra widespread use of mass stream meters in bunker deliveries. The Port of Singapore, which for a few years was dogged by reputational points as a result of endemic apply of brief deliveries, has mandated the usage of MFMs with notable success.
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The continuing navy battle in Ukraine maintains excessive volatility within the world bunker market. It may very well be hardly anticipated a steady pattern in gasoline costs to arrange subsequent week. Sharp irregular adjustments in bunker costs will proceed.
Supply: By Sergey Ivanov, Director, MABUX