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Market Dynamics Report

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. Dec-16. Both UK Power and UK Gas showed double figure YoY declines, posting 19% and 27% less monthly contracts respectively.

German Power was the only Power commodity to see a rise in YoY volumes, posting an 8% increase over Jan-16 to 686 TWh. This jump in volume traded was echoed by front month price, which jumped €10.77 over Dec-16, the highest level seen since Oct-12. Broker bilateral has benefitted from this increased action accounting for 61% of the volume traded, up from 55% in Dec-16 and 58% in Jan-16. Nevertheless, even though German Power holds a dominant position in the Euro Power grouping, its YoY growth was not enough to overcome the declines seen in the other commodities, as the group as a whole declined 12% YoY. French Power was the main driver of this YoY decline, dropping 63% vs. Jan-16 to 59 TWh traded while both Italian Power and Nordic Power declining 43 TWh (53%) and 29TWh (16%) respectively vs. Jan-16. UK Power followed the trend of its Euro-denominated counterparts dropping 19% vs. Jan-16 to end the month with 120 TWh traded. Even so, UK Power did see a MoM increase of 13% over Dec-16.

As German Power bucked the downward trend in the Euro Power, Austrian VTP bucked the trend in Euro Gas by posting a 24% increase in volume vs. Jan-16. All other commodities in the group saw a YoY decline with PSV seeing the highest percentage YoY decline, down 24% vs. Jan-16. TTF accounted 65% of the total groups YoY decline dropping 132TWh (6%) vs. Jan-16 to 1,929 TWh. Meanwhile, NBP saw a 577 TWh (27%) decline YoY, helping TTF start the year clearly on top with 125% of NBP's volumes. This is in contrast to Jan-16 where record volume growth saw them just fall short of taking the crown with 97% of NBP's volumes. MoM tells a different story with most Gas commodities seeing double figure growth vs. Dec-16. The only Gas commodities to see a MoM decline were NCG and ZEE, down 8% and 4% respectively vs. Dec-16.

Emissions saw a significant change in dynamics as broker bilateral accounted for 18% market share, that's up 17% from Dec-16. EUA's were the main driver of this change posting their highest broker cleared market share since Jan-11. Exchange executed also a MoM increase in market share resulting in broker cleared losing 26% market share vs. Dec-16.

Coal was an interesting story in 2016, with both prices and volumes rising, the dominance of broker cleared market share was eroded. Broker cleared volume for 2016 decreased 6.7% vs. 2015, while both exchange executed and broker bilateral volumes growing exponentially resulting in 2016 broker bilateral closing the year off at 7% of total volume. With the first month of the year down, this looks to be the new norm as broker bilateral and exchange executed accounted for 10% and 17% of January's volume respectively.


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Market Dynamics Report


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...


13.10.16

September was a month of increasing volumes and prices across the board.

September was a month of increasing volumes and prices across the board as every Power, Gas and Coal commodity (except PSV) posted their highest month end price for the year to date. Volatility was up, particularly in the power markets – UK Power volatility as measured by LEBA was 814% during September (vs. 113% in August), and French Power prices were volatile in the last week of the month. Total market share was fairly stable for the...


14.09.16

Monthly Dynamics Report August 2016

August 2016 saw total volume remain relatively flat, with a 0.9% drop vs. July to achieve 5.868 million monthly contracts traded for the month. Although overall volumes remained flat, it was a different story when looking at individual commodity groupings. Emissions saw a 39% drop in monthly contract volume and along with Euro Power, which saw a 12% decline, accounted for a majority of the downward pressure on total volume. UK Power, Coal and...


10.08.16

Volumes down across the board - impact of Brexit, MiFID 2 measurement, summertime?; exchange executions record for Coal

July 2016 saw volumes across the Euro Commodity markets drop 29% vs. June 2016. Total monthly contracts traded of 5.922m is the lowest monthly volume we have seen in 2016. Despite this, volumes YTD continue to show strong growth, with 54.13m monthly contracts traded up 20% vs. the same period last year. What's behind this month's significant drop in volume? Is it the full month impact of the Brexit vote? A reaction to the start of the...


13.07.16

Volumes up, API2 record, TTF back on top

June 2016 saw volumes increase to the third highest volume this year, with 8.353 million monthly contracts traded, up 21% vs. May 2016. With the Brexit vote towards the end of the month, how much of this increased liquidity occurred in the last trading week of June? Will we expect continued market volatility and increased liquidity as the uncertainty surrounding Britain's exit from the EU settles into markets? Looking at previous years,...


14.06.16

Volumes down, brokers gain across the board, coal bilateral market share highest since August 2014, exchanges continue to launch new products

May saw volumes drop after the seasonal anomaly of volume growth we saw last month. Volumes of 6.924 million monthly contracts traded were 15% down vs. April's 8.151 million monthly contracts traded, but up 48% vs. May 2015's nadir of 4.678 million monthly contracts. This fall in volume was coupled with a shift of market share back to brokers, with 71% of the 6.924 million monthly contracts traded via a broker (up 5% vs. April's 66%). Prices...