Once a week, bunker intelligence platform ENGINE will publish a snapshot of alternative and conventional bunker fuel prices in the world’s two biggest bunkering hubs. The following is the latest snapshot: 

18 March 2024

• Sharp Brent gain narrows Rotterdam bio-bunker premiums
• Singapore bio premiums widen despite subdued demand

All the prices in the chart above are adjusted for their fuels’ different calorific contents. This makes each of them VLSFO-equivalent, which means that the same weight of fuels in metric tonnes (mt) will theoretically allow you to sail the same distance because they contain equal amounts of energy.

Brent is sharply up on the week and has sent European oil-based bunker prices rallying. Rotterdam’s VLSFO and LSMGO price gains have outpaced B24-VLSFO and B24-LSMGO gains to narrow their discounts by $4-7/mt.

The opposite is the case in Singapore, where B24-VLSFO and B24-LSMGO have moved $2-5/mt further up and away from pure VLSFO and LSMGO grades, to render bio-bunker blends less unattractive alternatives for bunker buyers.

LNG remains the cheapest bunker fuel for vessels bunkering in Rotterdam. That is the case whether you consider the outright VLSFO-equivalent LNG price only, or this price with EUA costs included.

HSFO comes in just below LNG in price in Singapore, where it is about $50/mt more expensive to bunker LNG than in Rotterdam.

VLSFO

Rotterdam’s VLSFO benchmark has gained by $17/mt in the past week, supported by a $3.26/bbl ($24/mt) jump in underlying front-month Brent futures. Singapore’s VLSFO price has been steadier and recorded a $5/mt increase in the past week.

VLSFO availability remains normal in Rotterdam. Lead times for VLSFO stems have been stable over the past week, with traders advising 4-5 days for this grade.

Prompt availability of VLSFO is tight in Singapore and traders recommend lead times of 9-13 days for the fuel grade. Demand for VLSFO has also picked up in the port, a trader said, though it is still lower than it was in January and February.

Biofuels

Rotterdam’s B24-VLSFO HBE bunker price has gained by $13/mt in the past week.

A palm oil mill effluent methyl ester (POMEME) cargo was priced at $1,301/mt in the ARA region on Friday, according to PRIMA Markets. This price has gained around $11/mt over the past week, PRIMA said. POMEME-based biofuels can qualify for advanced biofuel rebates through the Dutch HBE system.

Singapore’s B24-VLSFO UCOME bunker price has come up by $10/mt over the past week. A UCOME cargo was recorded at $1,020/mt in China’s main ports on Friday, around $20/mt higher than the previous day, PRIMA reported. As Singapore relies heavily on Chinese UCOME imports, higher Chinese UCOME prices can raise Singapore’s UCOME prices.

Demand for B24-VLSFO bunker blends has slowed in Singapore, sources told ENGINE. Bio-blended bunker sales data from the Singapore port authority reflects this waning demand. Singapore sold only 16,000 mt of bio-VLSFO (mostly B24) in February, its lowest figure since August 2022. Lead times of up to seven days are generally recommended for B24-VLSFO in Singapore. But these deliveries are subject to barge availability as only a few barges carry the product, a trader added.

LNG

Rotterdam’s LNG bunker price has declined by $1/mt in the past week, tracking a similar decline in the front-month NYMEX Dutch TTF Natural Gas benchmark.

Forecasts of a mild temperatures throughout Europe have combined with already subdued demand and contributed to the recent downward pressure on European natural gas prices. Natural gas prices have also been suppressed by a lot of wind power generated in Germany and a recovery in Norwegian gas flow nominations, ICIS LNG analyst Robert Songer told ENGINE.

Singapore’s LNG bunker price has been rather steady and made a most gain of $3/mt over the past week.

High spot demand and price-sensitive buying behaviour among consumers has been supporting Asian LNG prices, according to an Energy Flux report. Japan’s LNG demand is expected to rise following an earthquake in the Fukushima region, Tony Jordan, senior Partner at Auxilione wrote in a market report.

Prompt availability of LNG bunkering remains tight in Singapore, a trader said.

EUAs

The Dec24 ICE EUA futures contract moved €1.00/mtCO2e ($0.78/mtCO2e) higher over the past week, to trade around $65/mt on Friday.

EUAs’ upward price trend was mainly influenced by aggressive buying at lower levels, commodities brokerage Freight Investor Services (FIS) said in a report. The absence of the biweekly Polish EUA auction on 6 March tightened the market, adding support to the price, FIS said.

By Konica Bhatt and Erik Hoffmann

Related: ENGINE introduces price tracker of comparable alternative and conventional bunker fuels

Photo credit and source: ENGINE
Published: 19 March 2024