Market Dynamics Report

April 2019: Monthly contracts down 11% from March record, exchange executions see record high 38% market share, UK Power up 7% vs March.

April 2019 saw monthly contracts traded fall below last month's record high of 10.083 million to 9.013 million, down 11% MoM. Euro Gas drove April's seasonal volume decline, down 12%, while Emissions fell 14%. UK Power was the only commodity group to show unlikely April growth, up 7% MoM. Euro Power and Coal saw smaller declines, down 6% and 3% respectively. Commodities across the board saw prices plateau from extended falls since the turn of the year.

Exchange executed contracts in April rose to a record 3.402 million, with market share up 6% MoM to a historic high of 38% (since Jan-11). Broker cleared (10%) and broker bilateral (52%) both experienced 3% drops in market share. As we reach 12 months since the implementation of MiFID II, what could be driving this market shift towards the exchanges?


Euro Gas volumes remained above 4,000 TWh for the second month in a row, despite finishing down 12% MoM at 4,006 TWh. TTF, which has seen 36% and 25% March to April declines in the previous two years respectively, fell a modest 9% to 3,476 TWh. Notwithstanding this overall TTF fall, volumes within each execution method remained in the top three historically (since Jan-11), with a record high exchange executed volume. TTF market share continued to shift this month, with exchange executions accounting for a record 32% of volume, up 4% MoM, and broker bilateral falling 3% to 61%, a record low for the second consecutive month. Broker cleared share fell 1% MoM to 7%.

All other gas commodities saw April declines, NBP down 8% to 1,172 TWh and NCG down 27% to 160 TWh. It's worth noting that five of eight gas commodities observed YoY growth of over 30%, including Austria VTP (87%), TTF (86%) and PSV (73%) – highlighting the growth in Euro Gas. May the combination of cooler April temperatures in comparison to last year's record highs as well as record high LNG receipts in Europe be accountable? Market share movements also saw a wholesale shift in the gas market, with exchange executed market share rising for seven of the eight gas commodities, primarily at the expense of broker bilateral. NBP displayed the largest swing with a 13% surge to exchange executions (8% from broker bilateral and 5% from broker cleared), with France Hubs seeing an 11% shift all from the brokered market. As we move into May, will we see a similarly strong recovery in the gas market as we witnessed last year, where volumes rose 26%?


As it did in 2018, volume in German Power held relatively firm during the seasonal decline in April to finish down 2% MoM. Euro Power as a whole fell 6% with French Power leading the falls, down 20% MoM. UK Power managed to buck the seasonality trend to finish 7% higher MoM, with Dutch Power the only other power commodity to display April growth, up 1%. Looking at YTD figures, UK Power is up 11% and Euro Power is up 1%, driven by strong YTD performances from Spanish Power, up 22%, and Italian Power, up 14%. Similar to the gas market, Euro Power saw changing group dynamics, with wholesale shifts in market share towards exchange executions. Seven of the nine power commodities saw a rise in exchange executed market share with Belgian Power leading the way in percentage terms with a 10% rise (8% from broker bilateral), while German Power and Nordic Power both experienced 3% swings from broker cleared to exchange executed.

UK Power prices saw a mild recovery from a steady decline since November 2018, up 4% MoM to £43.18 per MWh, as did the majority of the Euro Power markets, with German Power up 7% MoM to €38.35 per MWh, and Nordic Power up 9% MoM to €40.85 per MWh. Will we see prices rebound in the power market following a consistent period of decline?


Coal volumes for April fell 3% MoM to 133mmT driven by a 5% fall in API2. API4 coal recovered slightly from its slow start to 2019 and saw the largest commodity growth in April, up 20%, though is down 27% YTD. The UK's recent coal-free week is further driving home the adoption of renewables in the global energy landscape. All three traded coal commodities saw moderate swings in market share from broker cleared to exchange executed, with API2 exchange executed market share up 5%, API4 up 4% and gC Newcastle up 6%. The cleared coal market saw ICE's market share move to 75%, up 6%, following a fall in March, with CME holding the remaining 25%.


Emissions volumes again saw the largest fall of all commodity groups in April, down 14% MoM, following an 11% decrease in March. The group currently sits down 14% YoY and up 10% vs YTD 2018. CERs finished down 60% MoM and EUA volume fell 14%, while EUA Dec-19 prices rose a record high of €26.29 / tonne, up 22% from March. How much longer will see restrictions on the auction of emission permits within the UK?

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