(Mabux) Global fuel demand is showing some signs of improving although the market outlook is still quite bearish with the coronavirus outbreak.
The World Bunker Index MABUX showed a slight upward evolution in the last 7 days for all major types of bunker fuel. The 380 HSFO index was steady: 301 – 302 USD / MT (+0 USD), VLSFO rose from 356 to 367 USD / MT (+11 USD), MGO added 11 USD: from 435 to 446 USD / MT (+44 USD).
The spread between Singapore VLSFO (0.5% sulphur) and Rotterdam VLSFO (0.5% sulphur) fell to $30.00/MT in 3 weeks
The price difference between 380 HSFOs and VLSFOs (the so-called Scrubber Spread (SS)) averaged USD 57.06 (56.04 USD a week before). It should be noted that the SS indexes in Rotterdam and Singapore are almost equal now: 74-75 USD.
The stability of marine fuels available in the ARA hub has deteriorated in the last months because of changing blend components and co-mingling. Co-mingling fuels of different origins can boost sediment levels, which make the blend unstable, and can form sludge, which can cause engine damage.
The spread between Singapore VLSFO (0.5% sulphur) and Rotterdam VLSFO (0.5% sulphur) fell to $30.00/MT in 3 weeks of July so far, from $32.00/MT in June. The spread is still not wide enough to stimulate transportation of cargoes from Europe to Asia.
The freight rates have dropped in the second half of June, but that did not help the supply of fuel to Asia to increase. Meantime, more than 500,000 MT of HSFO is expected to flow from Singapore/Malaysia to the Red Sea for July loading to meet demand from power and desalination plants in Saudi Arabia.
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