Fuel Switch Snapshot: Rotterdam's LBM at greater discounts

LBM now $213-375/mt cheaper than B100

B100’s discount to VLSFO widens in Rotterdam

Singapore’s VLSFO-B100 spread at $471/mt

All bunker prices described in the text below have been adjusted for calorific contents to make them VLSFO-equivalent. They have estimated EU-EU voyage compliance costs included for Rotterdam, and nonEU-EU compliance costs included for Singapore. These account for EU ETS costs and FuelEU Maritime penalties, and the average price of compliance surpluses we have picked up from the FuelEU pooling market from the past week. Rotterdam's B100 and LBM prices also factor in Dutch HBE rebates for advanced liquid and gaseous biofuels sold in the Netherlands.

The ENGINE-assessed FuelEU Maritime pooling value has edged slightly up over the past week. The pooling value for B100 consumed on EU–EU voyages has increased by $2/mt to $678/mt.

Ships will not rack up any EU ETS costs when they run on 100% biofuel (B100) or 100% liquefied biomethane (LBM).

With an HBE-rebate, the effective cost of bunkering B100 in Rotterdam and consuming it between EU ports comes down to $478/mt, which is $130–354/mt cheaper than conventional fuels.

LBM’s FuelEU pooling value has increased by $3/mt to $941–1,102/mt, which brings down cost of bunkering HBE-rebated LBM in Rotterdam to just $116–277/mt.

A higher compliance surplus price has widened LBM’s discount to VLSFO in Rotterdam by $21–22/mt in the past week, to $392–554/mt. Its discount to B100 has gone up by $11–12/mt to $213–375/mt, depending on the vessel’s engine type and methane slip bracket.

Liquid fuels

Rotterdam’s VLSFO price has gained $8/mt in the past week, mostly tracking a $10/mt ($1.37/bbl) rise in front-month ICE Brent futures. The port's LSMGO benchmark has moved in the opposite direction, clocking a $44/mt drop in the past week.

Singapore’s VLSFO price has edged down by $3/mt, while its LSMGO has plunged $63/mt lower on the week.

B100 prices in Rotterdam (-$1/mt) and Singapore (+$1/mt) have remained mostly steady in the past week.

Rotterdam B100’s discount to VLSFO has widened by $10/mt on the week to $179/mt, while its discount to LSMGO has narrowed by a sharp $44/mt to $354/mt.

Singapore’s B100 has inched $4/mt further away from its VLSFO and is now at a $471/mt premium.

Liquid gases

Rotterdam’s LNG and LBM bunker prices have each declined by $13/mt in the past week. LBM’s discount to fossil LNG in Rotterdam has widened by a slight $1/mt to $397/mt.

The port’s LNG bunker price has mostly been driven lower by a 4% drop in the front-month Dutch TTF Natural Gas contract.

Singapore’s LNG bunker price has moved lower by $6/mt in the past week, mirroring a drop in the NYMEX Japan/Korea Marker (JKM) index. Weak spot demand in the Chinese LNG market has weighed on the JKM benchmark.

LNG stands at a $63/mt premium over VLSFO in Singapore for vessels with Otto medium speed engines, but shifts to a $18/mt discount for vessels with diesel slow speed engines.

By Konica Bhatt

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