September 2018: TTF and EUA with record volume months, German Power highest since Nov-16.
September 2018 was a tale of the large commodities within the groups driving high monthly figures. 8.888 million monthly contracts were traded, up 29% MoM, with all groups rising vs August. Emissions was the standout up 60% as its strong year continued. Euro Power rose 46% MoM, reaching a high not seen since Nov-16, with Euro Gas rising 24% MoM. YTD we have seen 67.751 million monthly contracts traded, up 9% vs YTD 2017. As we move into the winter season, European power and gas prices are soaring. Whilst we are forecast for a mild start to winter, if we see plunging temperatures or further supply shocks the European markets will be tested – we are set for an interesting winter.
Euro Gas' 24% growth this month was driven by a record month from TTF. The Dutch gas hub increased 29% MoM to 2,648 TWh, the highest on record (since Jan-11), eclipsing Mar-18's previous high by 158 TWh. We saw a 1% shift in market share from broker cleared to exchange executions as all execution methods saw strong volumes. NBP rose 12% MoM driven by a 3% growth in broker bilateral, which regained ground following the record cleared share in August. TTF's growth propelled it to 201% of NBP's volume for September, the first time we have seen the 200% barrier broken. The German gas hubs saw double digit growth MoM, Gaspool up 19% driven by a 5% shift in market share towards broker bilateral from exchange executions, whilst NCG rose 12%. Only Austria VTP and ZEE fell MoM, down 25% and 48% respectively.
All commodities rose MoM in what was a standout month for power, Italian Power the highest up 61% MoM. It was German Power that drove the group's growth, with its largest volume since Nov-16, up 56% MoM to 783 TWh. All execution methods grew in German Power, however broker bilateral took 3% market share from exchange executions. What is driving the German Power growth? Spanish Power's growth this month produced a noticeable shift in market share, with exchange executions losing 24%, 22% moving to broker cleared. It was a newsworthy month for Nordic Power with the Nordic Association of Energy Traders' (Naet) day of increased trading on 12th September and the default of Einar Aas the following day. Nordic Power ended the month up 14% MoM and down 10% YoY, with broker cleared taking 3% market share from exchange executions – it will be interesting to watch liquidity in this market over the coming months.
Coal rose 3% MoM, driven by API2's 16% growth, whilst API4 and gC NEWC fell 43% and 37% MoM respectively. In the cleared market battle CME gained 3% market share from ICE to end at 25%. API2 front month price rose 1% to break the $100 per tonne barrier at $100.15. With gas supplies tight, prices high, and EUA price growth slowing this month, will we see an increase in coal power generation over the winter?
A strong month for this year's standout performer saw Emissions grow 60% MoM to register its highest volume on record (since Jan-11). Exchange executions gained 4% market share from broker bilateral, and CER, whilst small volumes, increased tenfold vs August, driven by broker cleared. Emissions now stands at 48% growth vs YTD 2017. EUA price for Dec-18 was up 1% at €21.21.