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Market Dynamics Report

Volumes up across the board MoM, mixed performance YTD. TTF remains strong, exchange executions break 40% market share in Coal.

May 2018 saw 8.408 million monthly contracts traded, up 22% MoM following a low April. All groups rose vs April, with UK Power the highest, recording a 31% MoM increase. Euro Gas, UK Gas and Euro Power also saw noticeable increases at 26%, 25% and 23% respectively. YTD we have seen 38.605 million monthly contracts traded, up 9% vs YTD 2017. This was driven by Euro Gas up 21% YTD and Emissions up 53%, Euro Power was even YTD, whilst UK Power, UK Gas and Coal all recorded declines.

Euro Gas saw its strong year continue, up 21%, recording its third highest month (since Jan-11). TTF recorded its second highest month ever with 2,376 TWh, 114 TWh behind the record set in March 2018. Exchange execution drove the TTF volumes taking 3% market share from both broker bilateral (-2%) and broker cleared (-1%). YTD TTF’s volume stands at 170% of NBP volume, up from 118% this time last year. MoM growth was seen in five of the seven commodities, as ZEE and France Hubs saw the only declines, down 20% and 6% respectively. PSV saw a 44% MoM increase, recording the third highest volume recorded at 95 TWh (since Jan-11). Front Month NBP and TTF prices continued to rise MoM, up 8% and 10% respectively. With inventories dropping to a five year low following the bitterly cold winter, what can we expect of prices through the rest of the year?

All commodities within Euro Power saw both MoM and YoY increases. The smaller commodities are all showing growth however Nordic Power and German Power’s slow start to the year mean YTD Euro Power is even vs. YTD 2017. Standouts were Italian Power, Belgium Power and Spanish Power up 61%, 47% and 41% MoM respectively. Much of this MoM growth was driven by broker bilateral, with seven of the nine Power commodities showing increases (German Power and Nordic Power both saw gains in broker cleared). UK Power recorded MoM growth driven by broker bilateral’s 5% gain in market share, however total volume remains down 10% YTD.

Coal saw MoM increases in all three commodities with exchange executions being the main benefactor, gaining 7% market share and breaking the 40% market share barrier (42% exchange executed /58% broker cleared). Will exchange executions become the majority market share holder in 2018? ICE showed gains in the cleared market share, up 4% to 80% vs CME. Front month prices of API2 rose 12% MoM to $95 per tonne.

Emissions continued to grow, up 1% MoM, with broker bilateral taking a sizeable hit in market share, down 15% to 2%, primarily at the benefit of broker cleared.

Downloadable Content

File:
Euro Commodities Report - May 2018

Downloadable Content

File:
Euro Commodities Report - May 2018