Bunker fuel outlook – Week 03
During the 03rd week, the MABUX global bunker indices demonstrated a consistent upward trend. The 380 HSFO index rose by 16.79 USD, climbing from 521.15 USD/MT last week to 537.94 USD/MT. The VLSFO index increased by 17.19 USD, reaching 621.98 USD/MT, up from 604.79 USD/MT last week, surpassing the 600 USD threshold.
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Meanwhile, the MGO index saw a gain of 31.70 USD, rising from 771.13 USD/MT to 802.83 USD/MT, breaking the 800 USD mark. At the time of writing, the global bunker market continued to exhibit a moderate upward trend.
The MABUX Global Scrubber Spread (SS) — the price difference between 380 HSFO and VLSFO — showed minimal changes this week, rising by just $0.40 (from $83.64 last week to $84.04), remaining well below the $100.00 breakeven mark.
The index’s weekly average increased by $4.21. In Rotterdam, the SS Spread widened by $4.00, reaching $80.00 compared to $76.00 last week. The weekly average in the port showed a more significant increase, rising by $11.83. In Singapore, the price difference between 380 HSFO and VLSFO narrowed slightly by $1.00, moving from $97.00 last week to $96.00, remaining near the $100.00 threshold. However, the weekly average in Singapore increased by $4.83.
Throughout the week, the Global SS Spread and regional indices lacked a clear trend, consistently staying below the $100.00 mark. Looking ahead, we expect the SS Spread dynamics to remain largely unchanged next week, with fluctuations likely to continue in both directions. For more detailed information, please refer to the “Differentials” section on mabux.com.
Europe’s early winter cold snap drove liquefied natural gas (LNG) imports to near-annual highs in December, with US LNG supplies reaching their highest level since January 2024. After two consecutive milder winters, this year’s winter has been the coldest since the 2022 energy crisis.
Consequently, natural gas inventories in European storage are depleting at their fastest rate in seven years, now below the five-year average for this time of year. In December, European LNG imports surged to an 11-month high of 10.89 million metric tons, with half of that volume (5.22 million metric tons) sourced from the US. The steep drop in European gas inventories signals a growing need for increased LNG imports—not only to meet demand through the current winter but also to replenish storage levels during spring and summer in preparation for the 2025/2026 winter.
As of January 13, European regional storage facilities were 64.98% full, reflecting a decrease of 3.85% compared to the previous week and 6.35% compared to the beginning of the year. The gas withdrawal process remains ongoing. By the end of the 03rd week, the European gas benchmark TTF experienced a slight decline, dropping by 0.527 euro/MWh to 46.947 euro/MWh, down from 47.474 euro/MWh last week.
The price of LNG as a bunker fuel in the port of Sines (Portugal) decreased by $49 by the end of the week, reaching $982/MT on January 13. Meanwhile, the price gap between LNG and conventional fuel also narrowed significantly: $175 in favor of MGO LS, compared to $274 a week earlier. On the same day, MGO LS was priced at $807/MT in the port of Sines. For more details, visit the LNG Bunkering section on mabux.com.
During Week 03, the MABUX Market Differential Index (MDI)—the ratio of market bunker prices (MBP Index) to the MABUX digital bunker benchmark (DBP Index)—showed mixed dynamics across the four major hubs: Rotterdam, Singapore, Fujairah, and Houston. Notably, there was a significant reduction in underpricing levels within the MGO LS segment.
- 380 HSFO segment: Weekly average undervaluation decreased by another 2 points in Rotterdam and 27 points in Singapore. Conversely, it increased by 6 points in Fujairah and 12 points in Houston. Singapore’s MDI is nearing a 100% correlation mark between the market price (MBP) and the MABUX digital bunker benchmark (DBP).
- VLSFO segment: Weekly underpricing dropped by 45 points in Rotterdam and 20 points in Singapore, but rose by 1 point in Fujairah and 4 points in Houston. The MDI in Singapore approached a 100% correlation mark between MBP and DBP.
- MGO LS segment: Singapore moved into the overvalued zone, with the weekly average overcharge surging by 113 points at once. In the other three ports, MGO LS remained undervalued, with the weekly average declining by 129 points in Rotterdam, but rising by 8 points in Fujairah and 1 point in Houston. The MDI index in Rotterdam approached a 100% correlation mark MBP/DBP, and Fujairah’s index remained above the $100.00 mark.
The balance of overvalued and undervalued ports shifted slightly, with one port (Singapore) entering the overcharge zone in the MGO LS segment. Despite undervaluation still dominating across all ports, its premium has narrowed significantly. Looking ahead, the trend of decreasing undervaluation with a gradual shift toward the overvaluation zone is expected to continue next week.
Further insights on the correlation between market prices and the MABUX digital benchmark are available in the Digital Bunker Prices section of mabux.com.
Clarksons Research’s Global Shipbuilding Outlook 2024 revealed that 2024 marked the highest ship order book in 17 years, driven by increased production from Chinese shipyards and a growing backlog of alternative fuel ships. China accounted for over two-thirds of all tonnage contracts, securing a leading position in every major market sector except gas.
Global shipyard production rose by 13% in 2024, with China achieving an 18% year-on-year (y-o-y) increase, contributing 53% of the total compensated gross tonnage (CGT). South Korea grew by 28%, while production marginally declined in Japan (down 3%) and Europe (down 4%).
The review also highlighted factors bolstering the cargo market, such as rerouting due to the situation in the Red Sea and the gradual shift towards a “green” fleet. The total order book expanded to 364.5 million DWT (15% of the global fleet), which compares to 628.8 million DWT (52%) recorded in 2008. Orders remained concentrated on liner and gas carriers, while bulk carriers (11%) and tankers (14%) maintained a smaller share of the order book, with only five VLCCs delivered in 2024.
Additionally, half of the tonnage orders for 2025 are designed for alternative fuels, with dual-fuel LNG vessels dominating. The review underscored the growing adoption of energy-saving technologies (ESTs), which are increasingly becoming standard in many projects.
We expect the global bunker market to maintain its moderate upward momentum next week.
Source: MABUX
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