August 2018: Volumes bounce back following low July, cleared market records in NBP.
August 2018 saw 6.912 million monthly contracts traded, up 16% MoM, signalling the end of the summer lull in trading. All groups rose MoM, UK Power the standout up 26% with UK Gas also strong up 24%. Euro Gas drove the MoM growth however, up 18% MoM it accounted for 54% of the total monthly growth. YTD we have seen 58.864 million monthly contracts traded, up 9% vs YTD 2017.
NBP rose 24% MoM to 1,179 TWh, with a notable 8% loss in broker bilateral market share with 6% moving to exchange executions. Exchange executions now holds 55% market share, the highest ever recorded (since Jan-11), with the cleared market also peaking at 65% share – what has been the key driver behind this? The MoM growth was not enough to mask the weak year for NBP, down 17% YTD and 25% YoY. TTF kept relative pace with NBP’s growth, rising 21% MoM to 2,058 TWh. Broker bilateral market share for TTF fell 1% to 72%, with Broker Cleared and Exchange Executions splitting the gains. TTF’s volume was 175% of NBP’s this month, a 4% drop vs July. A year ago this figure stood at 100%, it’s a very different picture 12 months on as TTF has become the main gas price hub and benchmark in Europe. ZEE was the star Gas performer for the month, up 79% MoM, whilst the two German Hubs were the only ones to experience drops, both Gaspool and NCG falling 8% MoM. Elsewhere France Hubs rose 14% MoM, driven by an 8% increase in broker bilateral share at the expense of exchange executions.
Seven of the nine Power commodities rose MoM, with Nordic Power and UK Power the standouts at 27% and 26% respectively. Broker bilateral drove UK Power growth, gaining 4% market share from exchange executions. German Power rose 11% MoM to 501 TWh to remain up 1% in the YTD metric. Euro Power as a whole rose 12% MoM and is up 3% YTD. Spanish Power was the notable faller, down 25% MoM. Broker cleared share fell 22% MoM to end at 21%, the lowest since Feb-17, whilst exchange executions saw its market share rise to 71%, a record high in the Spanish Power market. In contrast to July where it was the only MoM riser, Belgium Power fell 3% from July to August. It remains up however in both YTD (60%) and YoY (176%) metrics and is the standout Power commodity this year.
The July lull allowed some positive Coal metrics to appear in August, with 6% growth MoM. Whilst API2 was down 2% MoM it was buoyed by strong performance from the other two contracts, with API4 up 20% and gC NEWC up 60% MoM. Interestingly though the YoY metrics were up for all three contracts, a rare glimmer of positive trading volume news in this market. ICE gained 3% market share, up to 78%, whilst API2 front month price was up 4% to $98.80 per tonne.
Emissions grew 5% MoM to 725,493 tonnes traded, driven by EUA’s 5% MoM expansion. YTD Emissions remains up with a healthy 50% growth. The same can’t be said for CER, falling 94% MoM and down in all three metrics, with broker cleared volumes back to zero following 62% market share in July. EUA prices for Dec-18 continued upwards, rising 21% to €21.09.