x

Market Dynamics Report

SEPTEMBER 10 2014

August 2014

Market volumes drop across the board, TTF grows to 92% of NBP, and ICE continues to build upon its success in NBP.

Following the unusually high volumes we witnessed last month, August registered volumes in line with seasonal trends with volumes dropping MoM across all commodity classes. YoY, volumes in the Gas and Power markets were up significantly while the Coal and Emissions markets experienced a decrease.

August 2014 saw the TTF market grow to 92% of NBP. YTD volumes in this market have grown by 63% in comparison with a growth of 27% YTD in NBP, further highlighting the growing importance of this market to the European energy space and its potential to overtake NBP as the main gas hub in the near future. TTF continues to remain a heavily brokered market with 87% of total volume executed bilaterally in August; ICE Endex hold 12% and PEGAS the remaining 1%. In contrast the NBP market is seeing the proportion of volume executed bilaterally declining as ICE continues its strong performance in this market. Exchange execution market share stood at a record 50% with a further 7% coming from broker give ups, this takes the cleared market share to 57% which is the highest proportion since our records began. Will TTF volumes exceed NBP in 2014? Will the continued geo-political uncertainty in Ukraine play a role in higher gas market volumes as the Winter of 2014 approaches?

The European gas markets of NCG and Gaspool experienced a decline in monthly volumes vs. July 2014 by 25% and 22% respectively but have seen volumes increase by 32% and 30% respectively year to date.

The key European coal markets of API2 and API4 saw combined volumes decrease by 37% vs. July 2014 to their lowest level YTD. Year to date API4 has seen a 17% growth in volumes in comparison with API2 which has seen an 8% decrease. CME continues to the be the preferred choice of clearing venue in the Euro Coal market, holding 76% of the cleared API2/API4 market combined in August, down 1% vs. July. EEX's re-launch into the coal market back in May has thus far proved to be largely unsuccessful, with zero volume registered in the last two months.