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Trayport's Monthly Report On European Commodities February 2019: Another Record Month For Euro Gas, Driven By TTF And NCG Highs - German Power Up 8% Mom, Emissions Up 8% MoM.

Date 15/03/2019

February 2019 saw 8.970 million monthly contracts traded, up 2% MoM. Emissions was the largest climber, 8% vs January, with Euro Power up 6%. Following a record start to the year, Euro Gas reached new heights in February at 3,889 TWh, up 4% MoM. The remaining groups saw a decline in volumes, with the UK commodities registering the largest drops, UK Power down 18% and UK Gas down 12% - could the UK’s particularly mild winter be behind this? Total contracts traded are up 18% vs YTD 2018.


As mentioned, Euro Gas recorded 3,889 TWh in February, up from January’s previous high of 3,756 TWh. TTF, the largest constituent of the group, rose 3% MoM to end at 3,136 TWh - also a record. With NBP down 12% MoM at 1,001 TWh, TTF was 313% of NBP’s volume in February, the first time we have seen this figure over 300%.  Euro Gas is up 37% vs YTD 2018, with TTF up 36%. Europe is expected to be the fastest-growing market for LNG in 2019, and with TTF integral as a hedging tool for LNG we await to see how much this further drives volume throughout the year. 

It was an interesting month for the remaining Euro Gas commodities, whilst MoM performance was varied volumes remained high vs YoY figures, signalling continued strength of the group. NCG was up an impressive 35% from its January record at 292 TWh, whilst Gaspool, down 11%, still recorded its third highest volume since records began (since Jan-11). It was a similar story for VTP, PSV and France Hubs, where MoM results were mixed, yet volumes ranked in the top three historically. With the regional markets often traded as a spread to TTF, it begs the question of how much their growth contributes to TTF’s new highs.

Market share was only slightly affected, Euro Gas as a whole saw exchange executions give up just over 1% share, moving primarily to broker bilateral. Within NCG’s growth we did see a 4% shift towards broker bilateral from exchange executions, whilst NBP saw 3% share move from the cleared to the brokered market.


Euro Power rose 6% MoM, driven in the most part by its largest contributor, German Power, which was up 8% vs January. Results for the remaining commodities were mixed, with CEE Power rising the most, up 26% MoM, whilst Spanish Power fell 8%.

YTD volumes are down 1% vs 2018, with German Power up 3%. The YTD drop is largely driven by French Power, down 32% YTD – it had a very strong start to 2018. Front month German Power prices have dropped 34% since Dec-18, compared to a 10% drop over the same period last year. With the mild European weather pushing prices downwards, how much would this have driven volatility in the markets? Broker bilateral saw market share losses in six of the eight commodities; however the overall impact was minor, with broker bilateral share down 0.4% as a whole.

UK Power fell 18% MoM, however volumes are up 15% vs YTD 2018. In February we saw a 2% shift away from the brokered market towards exchange executions this month.


Coal volumes dropped 6% MoM, with API2 falling 4% and gC NEWC down 31%. API4 saw a 29% rise vs January. Exchange executions gained 5% market share this month largely driven by a shift in that direction in API2.  CME’s cleared market share rose 2% to 25%, with ICE holding the remaining 75%. API2 front month price was down 5% MoM at $75.05 per tonne. Coal volumes are 8% down vs YTD 2018.


Emissions rose 8% MoM to after being the only faller in January. The group is up 40% vs YTD 2018, buoyed by the growth in second half of 2018. We saw a 2% shift in market share to broker bilateral this month, mainly at the expense of broker cleared, whilst Dec-19 price was down 3% at €22.30 / tonne.