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Market Dynamics Report

March 2018: Broker bilateral volume gains in Euro Gas, TTF and France Hubs set record monthly volumes and Emissions see price and volume jump.

March 2018 saw 8.181 million monthly contracts traded, up 9.8% vs. February and although March had one more trading day than February, this is still the first time since March 2017 that monthly contracts have broken the 8 million mark. UK Power, Emissions and Euro Gas contributed to the MoM growth, up 13%, 49% and 13% respectively, offset by small declines in the remaining groups. YTD we have seen 23.304 million monthly contracts traded, up 3% vs. YTD 2017.

Euro Gas had a good month of volumes as four of the seven commodities in the group recorded volumes in their top five monthly traded volumes since Jan-11. TTF continued its run in 2018 with another record volume month at 2,490 TWh, up 191 TWh vs. February and pushing TTF up 17% vs. YTD 2017. Interestingly broker bilateral was responsible for the MoM growth as broker cleared and exchange executions market share declined 1% and 5% respectively giving the remaining 77% of the market to broker bilateral. This record month accompanied by a 2% MoM decline in NBP resulted in TTF's value being 200% of NBP volume for March and 180% YTD. TTF has solidified itself as the benchmark European virtual trading hub. PSV also had a solid month of volumes, up 26 TWh to 94 TWh in March, the third highest volume on record (since Jan-11). Austrian VTP was the only commodity in the Euro Gas group to see a MoM decline in March, down 4% to 55 TWh.

Even with all this activity in TTF, France Hubs are the highlight of the month posting its largest volume on record (since Jan-11) at 151 TWh, up 150% MoM. As with TTF the jump in volume came largely from broker bilateral which saw a 16% shift in market share to end the month at 84%, at the cost of exchange execution. To put this in perspective, March's broker bilateral volume (128 TWh) was 56% of the full year of broker bilateral volume traded in 2017. How much of this jump in volume is a result of the regulators requirement to increase French Gas reserves? Can any of the shift to broker bilateral in TTF be a result of France hubs being traded as a spread to TTF?

The Power markets did not follow the trend seen in Gas with most commodities recording a MoM decline. German Power saw 516 TWh traded, down 9% vs. YTD 2017 and 23% down YoY. Spanish Power saw a 10% drop in front month baseload price with volumes following suit, down 29% to 11 TWh. Dutch Power offset the downward trend with a 13 TWh increase over February to end the month at 35 TWh. UK Power was not far behind seeing a 10 TWh increase to end the month at 89 TWh traded.

Coal continued the trend of declining volumes, down 25 tonnes vs. February as exchange execution becomes the favoured form of trading gaining a further 7% market share at the cost of broker cleared. gC Newcastle was the only commodity in the group to show a MoM gain up 13% although down 51% YoY.

Emissions was another interesting story for the month. EUA volumes were up 49% MoM to 947 tonnes, their third highest volume on record. Meanwhile, end of month prices for Dec-18 EUA contracts increased 31% to €13.28, which is 2.8 times higher than prices seen in March 2017.

Downloadable Content

File:
Euro Commodities Report

Downloadable Content

File:
Euro Commodities Report