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Market Dynamics Report

June 2017: German Power drags down monthly volumes despite continued growth in gas markets.

With half of 2017 completed, the trend of lower volumes continues. June produced MoM and YoY declines as total contracts traded retreated 2.8% from May levels settling at 6.454m contracts. Modest MoM volume growth in the gas markets were offset by significant declines in the power markets in particular the German and Italian markets, which were down 21% and 18% respectively. The 2017 YTD deficit widened to 14% vs YTD 2016.

In contrast to May when the dominant German Power market showed signs of overall volume growth, June produced declines across all metrics: down 21% MoM, down 41% YoY and down 8% YTD. The substantial declines were coupled with a continued shift toward the Broker Bilateral market as it gained a further 4% market share at the expense of the Broker Cleared market that held 12% of the German Power market in June compared to 17% in June 2016. Despite 2017 YTD total volumes being down 295 TWh (8%), Broker Bilateral volumes are on par with 2016 levels illustrating that the Broker Cleared and Exchange Execution are responsible for 100% of the 2017 YTD declines. Are the weaknesses in these markets a result from the recent split of the Phelix Power contract which itself was driven by German-Austrian bidding Zone split? We will pay particular attention to the German Power volumes as the market moves forward from this significant event.

Elsewhere in the Power markets there were small amounts of volume growth in markets such as UK Power, French Power and Spanish Power provided double-digit MoM growth. However, this was not enough to alter the yearly trend of volumes down YTD across all Power markets.  

As mentioned, the gas markets provided solid MoM volume growth across the board with two exceptions. France Hubs and PSV were down 17% and 21% respectively. However, these are the only two markets showing YoY growth this month. The tussle between the dominant TTF and NBP markets continues as both markets increased MoM volumes by 3% giving TTF 106% of NBP volumes in June. Interestingly the Broker Bilateral market gained 3% in NBP market share as volumes increased 68 TWh (12%) from May giving it 42% of the total market. The opposite was true in TTF as Broker Bilateral lost 6% of the market share in June as volumes declined 65 TWh (6%). Despite the MoM volume increases, 2017 YTD volumes remain below 2016 YTD levels across all gas markets. 

Coal has not shown any signs of bucking the overall trend as both API2 and API4 volumes are down across all metrics. API2 volumes are down 55% YTD vs. 2016 after declining 23% from May-17 levels to finish June on 125m metric tonnes traded. API4 experienced similar falls as volumes declined 12% MoM and is currently 66% below YTD 2016 levels. Broker Bilateral volumes continue to be non-existent in both coal markets following the data correction from LEBA last month. The Broker Cleared market stemmed the flow of volume to Exchange Executed as it gained 4% in both coal markets. Despite this, the growth in Exchange Executed volumes is impressive with API2 volumes increasing 21% YoY despite overall API2 volume down 63% YoY. CME lost further ground to ICE in the cleared coal market, down 3% from May-17 to 36% market share in June. Could the imminent closure of CME Europe and related shift of all CME Euro Energy products onto a single platform (NYMEX/Clearport) reverse the loss of market share as they achieve critical mass? Will make for interesting viewing into 2018. 

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Market Dynamics Report


16.06.17

Coal- broker bilateral volume updated due to incorrect contributed data. German Power shifts to broker bilateral

May 2017: Coal- broker bilateral volume updated due to incorrect contributed data. German Power shifts to broker bilateral.

In contrast to last year, May saw a MoM jump in monthly contracts traded, up 13% to 6.640m, almost on par with the volume achieved in May 2016. Increased volume in the gas market drove the MoM increase, as Euro and UK Gas buoyed by the increased number of trading days in May accounted for 61%...


15.05.17

The high volumes seen in March were not a sign of things to come.

April 2017: Volumes down across the board after a strong March, YTD Power focus highlighting declines in French Power.

The high volumes seen in March were not a sign of things to come. April starts the second quarter with 5.879m total month contracts traded, down 29.6% over Mar-17 and the lowest number of monthly contracts traded since Sep-15. YTD total monthly contracts traded were 28.358m, down 14% vs. 2016.

Power...


18.04.17

Spotlight on Coal. Volumes rebound from a slow start to 2017. PolPx volumes added to CEE Power.

March 2017: Spotlight on Coal. Volumes rebound from a slow start to 2017. PolPx volumes added to CEE Power.

March closes the quarter with a brighter tone as volumes across the board see largely double-digit MoM growth. Monthly contracts traded across all commodities was 8.344m; this is up 24% vs. February and is the highest number of monthly contracts traded since June 2016. Euro Gas was the largest contributor, accounting for...


13.03.17

Volumes down YoY; German Power & Austrian VTP buck the trend; Emissions sees a dynamics shift.

February 2017: Volumes continue to decline, prices cool off but UK Gas swims against the tide.

February picked up January's trend and ran with it as the majority of commodity groups continued MoM and YoY declines in volume. Monthly contracts traded across all commodities totaled 6.674m in February 2017, down 10% from January 2017 and 25% below that of February 2016. The declines in volume were across the board with...


10.02.17

Volumes down YoY; German Power & Austrian VTP buck the trend; Emissions sees a dynamics shift.

January 2017: Volumes down YoY; German Power & Austrian VTP buck the trend; Emissions sees a dynamics shift.

In contradiction to last year, 2017 has started without a bang with all commodity groupings posting a YoY decline in volume. Monthly contracts for January 2017 were 7.434m, down 16% vs. 2016 but up 26% MoM. Coal led the downward trend seeing a 52% drop in monthly contracts vs. Jan-16, although up 55% vs....


13.01.17

Recap on 2016, broker bilateral share continues to fall driven by Gas and Power, spotlight on Power markets.

December 2016: Recap on 2016, broker bilateral share continues to fall driven by Gas and Power, spotlight on Power markets.

Now the year has drawn to a close, let's recap on some key themes seen throughout 2016. The Coal market showed a significant shift away from broker cleared; starting the year at 97% market share and ending it at 72% with exchange execution being the main benefactor. TTF took the crown from NBP as...


13.01.17

Recap on 2016, broker bilateral share continues to fall driven by Gas and Power, spotlight on Power markets.

December 2016: Recap on 2016, broker bilateral share continues to fall driven by Gas and Power, spotlight on Power markets.

Now the year has drawn to a close, let's recap on some key themes seen throughout 2016. The Coal market showed a significant shift away from broker cleared; starting the year at 97% market share and ending it at 72% with exchange execution being the main benefactor. TTF took the crown from NBP as...


13.12.16

Volumes up, broker bilateral share down driven by Gas, spotlight on Gas markets

November 2016: volumes up, broker bilateral share down driven by Gas, spotlight on Gas markets

November 2016 saw total market volumes grow 7% vs. October 2016, to 8.09 million monthly contracts traded. All commodity groupings saw an increase in volumes this month. Emissions grew by the largest percentage, up 23% MoM to 666 million monthly contracts traded, contributing 24% of total market volume growth. All other...


10.11.16

TTF further solidifies position as largest market.

October 2016: TTF further solidifies position as largest market; Euro Power volumes up; Coal exchange executions at record levels; broker bilateral market share on the rise

October saw overall market volumes drop 1% vs. September to 7,572 million monthly contracts traded. Volume growth was mixed across the commodity classes, with the Power (up 16% MoM) and Emissions (up 10% MoM) markets seeing large volume gains but...