Market Dynamics Report

FEBRUARY 14 2014

January 2014

Record Euro Gas volumes, NBP volumes bounce back and a major exchange continues its ascendancy in the cleared coal market.

January 2014 saw the continued growth of the Euro Gas markets, setting a new record monthly traded volume and further emphasising their importance to the European Energy market. The main driver of the growth in Euro Gas volumes was the TTF market, where volumes were up vs. December and at their highest level since our records began in January 2011. TTF continues to be a heavily brokered market with the majority of the total volume executed bilaterally, remaining unchanged vs. December 2013 and unchanged YoY.

The German NCG gas market displayed interesting dynamics in January 2014, where volumes reached a record high, up vs. December. There were similar movements in the German Gaspool market, with volumes up vs. December.

NBP volumes reached their highest levels since February 2012. The front month price of natural gas was down MoM across the various commodity classes due to the relatively mild weather. Was this the major factor driving the sharp increase in gas volumes in January?

Volumes in UK Power were up MoM and YoY, to the highest level since February 2012. Euro Power volumes were also up vs. December, however in contrast to UK Power, volumes were down YoY due to January 2013 being a record month in Euro Power.

Volumes in the European Coal markets were back up in January following the holiday period. API2 volumes increased vs. December, while API4 volumes also increased. One major exchange group continues to be the preferred choice of clearing venue in the Euro coal market. It will be interesting to see how the battle for coal unfolds across 2014 between the global commodities exchanges as they aim to capitalise on this growing market.