LNG discounts to pure LSMGO in Rotterdam have widened by $40-42/mt over the past week, while liquefied biomethane (LBM) discounts to the conventional grade have widened by $42-43/mt.

This has marked a second consecutive week of widening spreads, with the cost gap becoming more pronounced over a two-week period.

Over the past two weeks, LNG discounts to pure LSMGO in Rotterdam have widened by $71-80/mt to $121-339/mt, depending on vessel engine type. LBM discounts to pure LSMGO have widened by $69-74/mt to $616-840/mt in the same period.

The wider spreads have increased LNG and LBM’s cost advantages over pure LSMGO for dual-fuel vessels operating in 0.10% sulphur-capped Emission Control Areas (ECAs) when bunkering in Rotterdam.

A sharp rise in Rotterdam’s B100 price has tightened its discounts to conventional fuel grades for a second consecutive week. Rotterdam’s B100 discounts to pure HSFO, VLSFO and LSMGO have narrowed by $23-49/mt over the past week to $151/mt, $199/mt and $382/mt, respectively.

In Singapore, B100’s premiums over conventional fuel grades have increased by $11-37/mt over the past week to $333-546/mt.

Liquid fuels

VLSFO price in Rotterdam has risen by $25/mt over the past week, largely tracking a $4.09/bbl increase in the front-month ICE Brent futures contract. Prima Markets’ assessed POMEME barge price for the ARA region has declined by $7/mt in the same period.

Rotterdam’s B30-VLSFO price has climbed by $45/mt, broadly tracking gains in pure VLSFO. The port’s B100 price has shot up by $71/mt in the past week, with a €10/mtCO2e drop in Dutch ZRE A tickets exerting some upward pressure.

Singapore’s VLSFO price has gained $23/mt over the week. Its B30-VLSFO price has increased by $31/mt and its B100 price jumped by $39/mt.

Singapore’s bio-blended bunker sales declined sharply in January, falling 34% to their lowest level since November last year. Total volumes dropped to 60,000 mt from 91,000 mt sold in December.

Liquid gases

Rotterdam’s LNG bunker prices have increased by $7-8/mt over the past week on rising Middle East tensions and low EU storage levels. Its LBM prices have edged up by $6–7/mt, depending on vessel engine type.

LNG is now $495/mt costlier than LBM when bunkered in vessels with otto medium-speed engines. This premium rises further to $501/mt for vessels with diesel slow-speed engines.

LNG bunker prices in Singapore have declined by $10-11/mt over the past week, pressured by softer regional demand for bunkering.

Bunkering activity in China remained slow during the Chinese New Year holiday period from 15-23 February, market sources said. South Korea also saw subdued bunkering demand during the Lunar New Year (Seollal) holidays from 16-18 February. This has added some downward pressure on the benchmark.

LNG is now $78-188/mt cheaper than pure LSMGO in Singapore.

Source: ENGINE