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Market Dynamics Report

MARCH 14 2014

February 2014

Continuation of growth in Euro Gas with a record month in TTF and NCG, Euro Power volumes down.

February 2014 saw volumes in Euro Gas reach their highest levels since our records began in January 2011. The TTF market was the main driver of this growth. TTF continues to be a heavily brokered market with the majority of the total volume executed bilaterally.

The German NCG and Gaspool markets continue to grow in liquidity, with volumes up in both markets MoM. Looking at their YTD volume growth, NCG and Gaspool have also grown significantly, highlighting the trend of growing importance of these two markets. The front month gas price of all Euro Gas contracts fell for the second consecutive month, is this drop in prices driving the high volumes in Euro Gas?

Volumes in NBP decreased vs. January 2014. Despite the drop in total volume, OTC broker bilateral volumes increased MoM and registered their highest monthly volume since March 2012. Broker Cleared and Exchange Executions also dropped this month.

The key European coal markets of API2 and API4 saw volumes increase marginally vs. January 2014. Year to date both markets are significantly bigger than 2013. One major exchange group saw volumes decline in both API2 and API4, in contrast to another which saw volumes increase. Coal recorded the largest year on year volume growth of the Euro Commodity markets for 2013, will we see similar growth across the whole of 2014 or are current growth levels unsustainable?

Volumes were down in most of the primary European Power markets this month. German Power volumes fell vs. January; UK Power volumes also fell MoM, while Nordic Power volumes fell too MoM. French Power was the only primary European Power market to register an increase in volumes, with volumes up MoM. The shift to clearing in German Power we witnessed in 2013 has continued YTD 2014. The cleared market share in February was unchanged vs. January. Will the cleared market maintain this share across 2014?