x

Market Dynamics Report

DECEMBER 9 2014

November 2014

Record year in NBP, TTF; Strong volumes in UK Power; Spanish Power dynamics fluctuate throughout the year.

November 2014 saw cumulative year to date NBP volumes break FY 2012 volume levels, with YTD 2014 volumes of 17,634 TWh 49 TWh greater than the previous record FY 2012 volumes of 17,585 TWh (FY 2013 volumes were down 14% vs. FY 2012). This means 2014 volumes are already at record levels since we began reporting, with one month remaining. The cleared market has seen the greatest increase in volumes – up 46% YTD 2014 vs. YTD 2012. Broker bilateral volumes have dropped 16% over the same period. What were the main drivers behind this increase in the cleared market? The continued evolution of the regulatory environment? The change in participant make up? Or is it driven by changing price dynamics reflecting political uncertainty and the possibility of disruption of supply?

TTF volumes fell for the second month in a row, down 6% vs. October 2014, and down 14% vs. the September monthly record of 1,281 TWh. Despite this, TTF volumes grew to 77% of NBP volumes for the month. YTD 2014 volumes of 12,943 TWh in TTF far exceed FY 2013's record of 8,302 TWh. Both the cleared market and the broker bilateral market are benefitting this year, with broker bilateral volumes up 3,500 TWh (50%) YTD 2014 vs YTD 2013, and the cleared market up 1,074 TWh (186%) YTD 2014 vs YTD 2013.

Similarly, UK Power could be on track for a record year, with YTD 2014 volume of 947 TWh just 54 TWh shy of the FY 2011 record of 1,002 TWh. YTD 2014 volumes are currently 27% up vs. YTD 2013 and 15% YTD 2012. In this market the broker volumes are increasing, with the UK Power market almost 100% broker bilaterally traded, with a very small proportion of cleared volume.

Spanish Power market dynamics are fascinating – volumes are down 16% MoM and the cleared market dropped back to 50% this month, from 59% last month. The cleared market proportion has fluctuated over the year, with the lowest proportion of 35% seen in July, and the highest of 72% seen in April. The Spanish Power clearing market is one of the most competitive, with ECC, BME Clearing and OMIP all offering services in this market.

CME's share of the API2 & API4 cleared market dropped to 75% this month, down from last month's record 85%. This amid declining volumes, with YTD 2014 API2 & API4 volumes down 7% vs. YTD 2013. The cleared market has stabilized at about 98% of the total API2 & API4 market over the last few months.


Downloadable Content

Commodities Report Nov 14 (868KB)

Downloadable Content

File:
Commodities Report Nov 14