Biofuel Bunker Snapshot: Bio-VLSFO premium narrows in Singapore

Dutch rebates for biofuel shrink

The ARA UCOME FOB price drops

Singapore

Singapore’s B24-VLSFO UCOME price has slumped by $16/mt in the past week, while the port’s B24-LSMGO UCOME price has risen by a modest $3/mt. The diverging price moves have further widened the B24-VLSFO UCOME discount to B24-LSMGO UCOME from $100/mt to $118/mt. 

Despite a slight $2/mt increase in the underlying ENGINE VLSFO price, the port’s B24-VLSFO UCOME price has declined. This has narrowed the B24-VLSFO premium over pure VLSFO from $146/mt to $118/mt. Though the premium remains wide, its narrowing could encourage the adoption of B24-VLSFO among shipowners.

PRIMA Markets assessed the UCOME FOB China benchmark at $1,045/mt on Friday, up by $5/mt on the week. Several UCOME FOB offers were floated in the market, but bids remained limited amid weak buying interest, the price reporting agency said.

The freight rate from China to Singapore for an MR tanker has gone up by $0.25/mt, to $13.50/mt now.

B24-VLSFO UCOME was offered at $750/mt in UAE's port of Khor Fakkan last week. One supplier stated that high operational costs, including those for storage, testing and blending, have contributed to keeping prices elevated.

Rotterdam

Both HBE biofuel benchmarks have gained marginally in the past week, with Rotterdam’s B30-VLSFO and B30-LSMGO HBE prices gaining by $2-3/mt.

The PRIMA assessed Dutch HBE ticket price for 2024 has declined further, slipping from €12.80/GJ ($13.36/GJ) to €12.10/GJ ($12.60/GJ). This has reduced the theoretical rebate for B30-VLSFO HBE blends sold in Dutch ports to $112/mt, down from $120/mt in the previous week.

Biofuel premiums in Rotterdam have widened by $5-6/mt over the past week. B30-VLSFO HBE blends are now priced at $185/mt over pure VLSFO, while B30-LSMGO HBE blends come at a premium of $145/mt over pure LSMGO.

The ARA B30-VLSFO UCOME price has shed $4/mt in the past week, while its B30-LSMGO UCOME price has come down by $6/mt. A $20/mt drop in the PRIMA Market’s underlying ARA UCOME FOB benchmark has contributed to pull both UCOME benchmarks down.

UCOME-blends remain unattractive for bunkering, as B30-VLSFO UCOME carries a premium of $106/mt over the rebated B30-VLSFO HBE. This disparity arises because UCOME blends do not qualify for Dutch advanced biofuel rebates. As a result, POMEME blends are more appealing for bunkering in Dutch ports, as they do qualify for these rebates.

A supplier indicated B24-VLSFO at $789/mt in Portugal last week. No bio-stem was booked last week, the supplier said. Gibraltar's B24-VLSFO was mostly priced about $12-15/mt lower than B24 prices in Portugal.

By Nithin Chandran

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