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Market Dynamics Report

August 2017: Power volumes increase while NBP makes a comeback amid slow gas market volumes.

August ended the summer months with a strong performance in monthly contracts traded, up 12% MoM to 6,405m. The improvement is largely driven by UK Gas (up 18% MoM), which accounted for almost 40% of the total MoM increase in contracts traded. The growth did not spread to UK Power, dropping 9% MoM to 139m monthly contracts. The YTD deficit continued to narrow in August, with 2017 YTD volumes down 11% vs. YTD 2016.

NBP was the star performer in the Gas category, with volumes increasing 18% MoM to 1,583 TWh in August. A 72% jump in broker cleared volume saw the highest volume on record (since Jan-11) and accounted for 32% of the total monthly volume increase. TTF took second place up 9% MoM but not enough to decrease the YTD deficit, down 7%. TTF MoM growth was just enough to stay ahead of NBP with a mere 4 TWh to end the month with 100.4% of NBPs volume. Austrian VTP and Zeeburger were the only other gas contracts to see MoM grains, up 2% and 6% respectively. Both German Gas contracts saw declines across the board with NCG being the worse off, down 9% MoM, 16% YTD and 30% YoY.

Coal volumes were down for the third consecutive month bringing the YTD deficit to 55% below 2016. As overall volumes decline, exchange executed volumes are remaining relatively resilient and are therefore continuing to grow its market share. August saw 28% of API2 volume transacted on exchange while API4 saw 9%, its 6th highest market share to date. ICE maintains its dominance to be the exchange of choice accounting for 68% of total cleared volumes in August. Prices are beginning to creep up with API2 and API4 ending the month at $86.15 USD (4% up) and $88.65 USD (6% up) respectively.

Euro Power increased 126 TWh (19%) vs. July. German Power accounting for almost 60% of the total increase to end the month at 483 TWh, the highest August volume seen since Aug-11. Nordic and Italian Power were both up 37% to 102 TWh and 39 TWh respectively. A 29% MoM growth for CEE power helped claw back some of the YTD deficit, now only 1% vs. 2016. UK Power didn't follow the trend with the only MoM volume decline, down 9% vs July.

Emission saw their highest volume of the year with 600 tonnes traded, almost double that of August 2016. EUA saw a MoM increase of 28% with broker cleared being the big winner increasing its market share by 14% to account for 38% of total volume. Commentary on CER is often omitted due to their relatively small size but their strong YTD performance is now worth a mention, up 274% to 44 tonnes. This is the highest YTD volume we have seen in CER since 2014.

Downloadable Content

File:
Euro Commodities Report

Downloadable Content

File:
Euro Commodities Report