Fuel Switch Snapshot: LBM reigns supreme

Rotterdam's LBM down $44-47/mt

FuelEU compliance surplus value tick up

Brent pulls down fuel oils and gasoil

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 prices also factor in Dutch HBE rebates for advanced liquid biofuels sold in the Netherlands.

Liquefied biomethane (LBM) still reigns supreme among fuel options for the lowest overall costs on EU-EU voyages. However, in Rotterdam 0 gCO2e/MJ LBM is at $236-401/mt discounts to even B100, depending on engine type.

The port’s LBM prices have dipped by $44-47/mt in the past week, and come in at just $50-215/mt when they are adjusted for EU ETS and FuelEU Maritime impacts.

The main reason for these low prices is the FuelEU compliance surplus values shipping companies can obtain from selling their surpluses into pools. Our assessed compliance surplus price has ticked up by €1/mtCO2 in the past week to €218.75/mtCO2e. For a massively overcompliant 0 gCO2e/MJ LBM, that translates to $819/mt off the LBM price when it is consumed in an Otto MS engine, and $960/mt in a diesel SS engine.

B100 prices have come down by $23/mt in Rotterdam and $13/mt in Singapore in the past week.

Rotterdam’s B100 is at $145-368/mt discounts to HSFO, VLSFO and LSMGO. Those discounts have gotten $14-15/mt bigger than last week.

Rotterdam’s B100 grade outcompetes fossil LNG, too. It’s $46/mt cheaper than LNG burnt in a diesel slow speed (diesel SS) engine, and $211/mt cheaper in an Otto medium speed engine. 

Liquid fuels

Rotterdam’s B100 has dropped amid an uptick in its pooling value and a weakening in the HBE-rebated outright B100 biofuel price. The HBE rebate has increased by $12/mt to $626/mt and is trending around its highest level of the year.

A drop in front-month Brent crude has pulled HSFO, VLSFO and LSMGO prices down by $9-13/mt on the week in Rotterdam. In Singapore, HSFO and VLSFO are down by a similar $10-11/mt, while LSMGO has plunged $31/mt lower and is at its lowest since the summer.

Liquid gases

Fossil LNG has been roughly steady on the week in Rotterdam and dropped by $10-11/mt in Singapore.

The front-month Dutch TTF Natural Gas contract has moved $5/mt higher in the past week. That upward pressure has been countered by a $5/mt drop in the assessed bunker delivery premium, which is now at $124/mt.

Dutch LNG bunker demand has been strong recently, according to Kpler. The market intelligence firm said volumes rose by around 20,000 cbm from October to 87,000 cbm in November.

Singapore's LNG bunker price has shed $12/mt amid a similar-sized decline in the front-month NYMEX Japan/Korea Marker (JKM) contract. The bunker delivery premium came off slightly from $2/mt to $95/mt.

Kpler estimates that 119,000 cbm of LNG was bunkered in Singapore in November, which was 13,000 cbm less than in October.

By Erik Hoffmann

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