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2022-01-06

MABUX: Global bunker market in 2021.

The global bunker market continued its recovery in 2021. After a sharp drop to lows in April 2020, triggered by the coronavirus pandemic and a subsequent collapse in economic activity around the world, since May 2020 global bunker indices have shown a moderate uptrend that continues nowadays as well. As a result, as of December 31, 2021, the Global HSFO 380 Index has already exceeded the maximums of 2020 (390.11 USD / MT, 07.01.2020) by 29%, and the Global MGO LS Index - by 4% (maximum of 2020 - 718.64 USD / MT, 06.01.2020), thereby regained completely the losses of 2020. The only fuel grade Global Index, which has not yet exceeded the 2020 highs, is VLSFO - minus 4% versus the 2020 high of 668 USD / MT (09.01.2020), however, it will probably also turn into plus in January-February 2022.

In 2021, 380 HSFO global bunker prices (monthly averages) increased by 24.8%, VLSFO by 26.3% and MGO LS by 29.9%. At the same time, the highest growth rate for 380 HSFO was registered in Central America (29.9%), for VLSFO - in South America (29.9%), for MGO LS - in North and Central America (31.0%). Prices for 380 HSFOs grew at the lowest rates in South America (19.7%), for VLSFO - in Africa / Middle East (23.7%), for MGO LS - in Asia / Oceania (26.9%). The growth rates of bunker fuel prices in Northern Europe were broadly in line with the world average: 22.2%, 24.9% and 30.6% for 380 HSFO, VLSFO and MGO LS, respectively.

The Global Scrubber Spread (SS) quarterly averages - the difference in price between 380 HSFO and VLSFO - initially faced a sharp decline from the 1st quarter highs ($ 174.46) to $ 41.51 in the 2nd quarter 2020, followed by a gradual recovery thereafter. In 2021, the Global Scrubber Spread remained close to the psychological mark of $ 100 most of the time, stably exceeding it ($ 124.56) only in the 4th quarter 2021. Meantime, by the end of December 2021, Global SS Spread came close to the $ 140 mark, but it is still significantly lower that the absolute maximum, registered on January 9, 2020 - $ 270.

As for SS Spread in Rotterdam and Singapore, the Index growth rate in these ports in 2021was higher than the world average. As a result, SS Spread in Singapore has been consistently above the $ 100 mark since the 1st quarter 2021, and in Rotterdam since the 2nd quarter 2021 (for comparison, the absolute maximum for Rotterdam is $ 290 (dd. January 01, 2020), for Singapore - $ 347 (January 09, 2020). The gradual growth of SS Spread globally and the steady surpassing of the psychological mark of $ 100 have improved the benefits of scrubber retrofits. According to DNV GL, the total number of vessels with scrubbers (in operation and on order) in 2021 reached 4,580, compared to 4,364 in 2020 and 3,163 in 2019.

The hopes that LNG as a marine fuel would significantly increase its share in the global bunker market did not materialize so far. The sharp rise in prices for natural gas, provoked by weather factors, unprecedented high demand in Asia versus shortage of energy resources in Europe, made this type of fuel temporarily uncompetitive compared to traditional types of bunker fuel. As a result, at the end of 2021, LNG bunkering was practically stopped, and the price of LNG, in particular, in the port of Sines (Portugal) as of January 4, 2022, exceeded the price of MGO LS by more than three times (2436 USD / MT versus 733 USD / MT).

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