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Market Dynamics Report

SEPTEMBER 10 2015

August 2015

Volumes down across the majority of Euro Commodity classes; API2 volume drives coal market growth; cleared market gains share in NBP, TTF and German Power.

August followed the seasonal trend we have seen over the past two years with volumes down across the majority of commodity classes covered in this report. Total monthly contracts were down 4.4% to 5.193 million driven by declines in Emissions, Euro Gas and UK Gas contracts. This is the third lowest total monthly contracts traded this year after April and May.

The Emissions market registered the largest MoM decrease, with volumes down 41%. This decrease was driven by EUA's which make up 98% of the Emissions market. Euro Gas volumes were down 3% this month largely driven by TTF, Gaspool and PSV which were down 4%, 29% and 15% MoM respectively. The UK Gas market followed suit with NBP volumes down 3%. The decline in both NBP and TTF volumes can be attributed to the broker bilateral market where volumes were down MoM, whilst cleared market volumes were up MoM in both gas hubs. We have mentioned in previous the reports the potential of TTF overtaking NBP as the largest gas hub by volume traded. Data used in this report indicates that NBP remains the largest gas market by volume with TTF volumes stable around 89-90% of the NBP market for the last three months.

Euro Power volumes were up 3% this month. Nordic and Spanish Power were the main drivers for the drop in Euro Power's July volumes. The two appear again in this month report due to a turnaround in both regions. Nordic Power recorded the largest MoM increase across all commodity classes covered in the report with volumes up 149%. July has traditionally been a quiet month in Nordic Power and last month's three year low may explain the high August MoM increase. Spanish Power volumes were up 14% MoM. This was not enough to boost YTD volumes which remain down 41% YTD 2015 vs. YTD 2014.

The European coal market made for interesting reading this month with volumes up 31% MoM. This increase was entirely driven by API2, with volumes up 40% vs. July. August's API2 volumes are the second highest reported (after Jan-15) since our records began. CME increased its cleared market share by 4% and 6% in API2 and API4 respectively, taking their share of the total cleared API2 and API4 market up to 87% this month.
There was a shift towards the cleared market in the two major gas hubs and German Power this month. The cleared market gained 3% in NBP pushing its share of the total market up to 60%. The TTF cleared market gained 4% increasing its share of the market to 29%, as ICE extended its cleared market share by 2% to 91% at the expense of PEGAS. The cleared market gained 8% in German Power in August pushing its share of the market up to 39%. NASDAQ saw the greatest share of this increase with total volume up 108% MoM for the exchange. NASDAQ gained 5% cleared market share from EEX pushing their own share of the cleared market up to 12%.


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Monthly Commodities Report (1MB)

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Monthly Commodities Report