Market Dynamics Report

FEBRUARY 13 2015

January 2015

Record breaking month in API2; TTF strong as CME Euro Gas Products Launch; French Power continues its upward trend.

Starting off 2015 at record levels since we began reporting, January saw Coal API2 contracts double their Dec 14 volumes with a 110% increase to 323 million tonnes vs 154 million tonnes. YoY growth was also substantial with an 83% rise vs Jan 14. In a market which is almost solely broker cleared (99.9%), the brokers and CME are the real winners here with ICE only increasing volumes by 88% vs a 110% market average. The extent to which January API2 volumes beat the previous high of 268 million tonnes (Sep-13), should also be noted, as this is a 55 million tonne difference. Is the price volatility of crude and the added volume in the oil markets driving increased volume in the API2 market? As 2015 unfolds and oil markets continue to be volatile, API2 is a definitive contract to watch.

TTF volumes rose to a new record this month - with volumes standing at 1,520 TWh - 18% higher than the previous high of 1,280 TWh in Sep-14. Volumes rose 54% vs Dec 14 and 37% YoY. CME launched their suite of Euro Gas contracts on the 19th of January, and they gained a 1% share of the cleared market with volume of 1.5 TWh. TTF has also shown a market structure shift away from broker bilateral, continuing the trend from 2013. Broker bilateral share now stands at 83% vs 92% Jan-14. Another move in market structure was the rise of PEGAS which increased 145% to 20 TWh MoM, taking 8% of the cleared market, up from 5% in Dec 14.

French Power could be on track for a record year with Jan-15 volumes at nearly double Jan-14 standing at 112 TWh vs 58 TWh: a 93% YoY increase. Not quite at record monthly levels of 117 TWh in Nov-14, Jan is a strong start to the year and is MoM up 10%. This continues French Power's upward trend seen throughout 2014 – with FY2014 volumes up 86% vs. FY 2013. Although the majority of this market is traded bilaterally with an 82% market share, this figure is decreasing (down from 95% Jan-14) as broker cleared and exchange executions - which both stood at 2% in Jan-2014 - are gaining traction, currently standing at 11% and 8% respectively.

Downloadable Content

Report Jan 2015 (814KB)

Downloadable Content

Report Jan 2015