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Market Dynamics Report

TTF has started the year on a high, with the Dutch virtual trading point posting record volumes this month. MoM growth was 52% as total volumes reached 2,061 TWh in Jan-16 - 14% higher than the previous record in Mar-15. The substantial increase in volume was driven by both the bilateral and cleared market, with the bilateral market up 71% MoM and cleared volumes up 61%. The record volumes were not enough to keep TTF at the top of the report's hotly contested gas and power volumes leaderboard, as TTF dropped back to 97% of NBP volumes this month. Although NBP was unable to surpass the highs we saw during February and March last year, volumes were up 72% MoM to 2,120 TWh.

Record volumes were a common theme across the report this month. YoY volumes were up across the board and only Emissions volumes were down MoM. Coal, UK Gas and UK Power lead the charge MoM, with volumes up 84%, 72% and 61% respectively.

The coal market increase was driven by API2, with volumes up to a record 365 million tonnes this month - 18 million above the previous high we saw in Sep-15. API2 volumes were up 85% MoM and 13% YoY, with API4 volumes up 84% MoM and 27% YoY. Total API 4 volume hit 55 million tonnes, the fifth largest volume since Jan-11. What is the driving force behind these high volumes? What role is the price volatility of crude playing? The API2 & API4 cleared market split between ICE and CME remained relatively stable this month with ICE gaining 1%, taking their cleared market share up to 32%.

There was another Jan-16 record, this time in UK Power where volumes were 148 TWh, up 3 TWh from the previous high in Mar-11. The brokers were the real winners with bilateral market volumes up 72% MoM, whilst cleared market volumes gained 10% over the same period.

Jan-16 saw the continuation of the increase in clearing in gas markets. This month the cleared market gained 4% market share in UK Gas and 2% in Euro Gas. While total NBP volumes in January were the fifth largest seen since Jan-11, the cleared market posted record volumes. The 60:40 cleared : bilateral split illustrates ICE's continued growth in UK Gas as they increased their total market share by 4% this month to 59%.

The majority of the Euro Gas market remains broker bilateral. The 2% shift towards clearing this month was driven by ICE in TTF, and PEGAS in NCG. The bilateral market gained market share across the remaining five gas hubs covered in this report.

Downloadable Content

File:
Commodities Report 2016

Downloadable Content

File:
Commodities Report 2016