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Market Dynamics Report

October 2018: TTF and EUA continue their rapid growth with further records; power market volume traded down MoM; coal market YTD volumes continue trend of decreasing volume and increasing exchange execution market share.

October 2018 saw a continuation of September's trends, with both TTF and EUA posting record volumes traded. Monthly contracts traded were up 6% vs. September, led by Emissions, Euro Gas and Coal, up 26%, 12% and 18% MoM respectively. UK Gas was down 3% MoM and UK and Euro Power were down 5% and 14% respectively.

Gas

The Euro Gas grouping saw record monthly volumes, at 4.8 million monthly contracts traded. All commodities included in the Euro Gas grouping saw growth, with TTF posting another record volume month, up 8% vs. September's previous high. NCG, Gaspool, France Hubs, Austria VTP and ZEE all saw double digit growth for the month. The growth in volumes only slightly impacted market share, with exchange executions up 1.5% at the expense of both broker cleared and broker bilateral. NBP did not show the same growth for the month, down 3% vs. Sep-18. Could the change of the gas year at the beginning of October, coupled with increased hedging of LNG against TTF, be likely drivers of the volume growth this month? Prices held up vs. last year but dropped vs Sep-18.

Power

All power markets with the exception of CEE Power showed a decline in volumes in October after the high of September. This was led by Belgian Power, down 30%, with German, Dutch, French and Nordic Power all showing double digit percentage declines. Despite the decline Euro Power volumes are still up 2% YTD 2018 vs. YTD 2017. Market share for the month moved similarly to Euro Gas, with exchange executions gaining 1% at the expense of broker bilateral and broker cleared volume.

Coal

The coal market has been characterised by declining volumes and relatively stable prices for the last couple of years. October 2018 saw MoM increases in volume for API2 and gC NEWC, while API4 declined. During this time of market volume decline, exchange executions have seen their share increase from 8% YTD 2016 to 37% YTD 2018. October saw the fourth largest volume in exchange executions since our records start, at 54 million metric tonnes, and 38% market share.

Emissions

Emissions continue their rapid growth in volume traded. October saw the emissions grouping of EUA and CER volume combined hitting a record, the highest total volume traded since November 2012. EUAs led the charge, again having a record volume traded month, at almost 1.5 billion metric tonnes traded. Prices declined in October from their peak last month. A lot of the volume growth is coming from the brokered market, with brokered market share YTD 2018 at 39%, vs. 33% YTD 2017 and 25% five years ago in YTD 2013.

Downloadable Content

File:
Trayport Euro Commodities Report October 2018

Downloadable Content

File:
Trayport Euro Commodities Report October 2018