MABUX: Bunker Prices Mixed, as VLFSO Stil Weak, While HSFO Prices Are Relatively Strong

A renewed rise in COVID-19 cases in parts of Europe and elsewhere have underlined worries about the outlook for energy demand. Expectations now are that the Covid-19 impact will last longer than originally forecast. The World Bunker Index MABUX still did not have any firm trend in the last 7 days and changed irregular. The 380 HSFO index rose from 310 to 316 USD/ MT (+6.00 USD), VLSFO lost 1.00 USD: from 367 to 366 USD / MT, MGO fell by 2 USD: from 446 to 444 USD / MT. The Global Scrubber Spread (SS) (price difference between 380 HSFOs and VLSFOs) narrowed by 5.00 USD and averaged USD 53.07 (58.07 USD a week ago).

Meanwhile, SS Spread in Rotterdam has dropped during the week from 47.00 USD (20.08) to 36.00 USD today, Aug.27. In fact, 30 days evolution of SS Spread in ARA demonstrates a sharp decline from 63.00 USD (28.07) to 36.00 USD (27.08).

In Singapore SS Spread has been steady during the week: 61.00 USD. Over the past 30 days, the SS Spread has only narrowed by 8.00 USD from 69.00 USD to $ 61.00.

The shape of price developments in the bunker sector in last 8 months has followed a similar pattern on crude oil market: a collapse from January through to late April and a gradual rebound since then, but with prices still well below those at the start of the year. There is still the narrow position of the VLSFO/ HSFO differential (SS spread) over the past 4 months. VLSFO price levels are currently rather weak because it is typically a blended product and component prices are weak due to low distillate/gasoline demand. On the contrary, HSFO prices are relatively strong because demand has been less affected than others and as the OPEC+ crude production cuts have largely focused on more heavy, higher sulphur crudes.

Source: MABUX