Europe Gas Traded Volume Rises, Value Slumps - Prospex

Gas traded volumes on western European markets in 1H 2016 grew by 24% year on year to 11,069 terawatt-hours of gas (1,029bn m³), a report by Prospex Research published this week has reported.

Its rate of volume growth however was eclipsed by coal trades, up 46%, and power trades, up 36%, while emissions volumes grew by just 5%.

Gas traded value slumped by 20% to €147bn, whereas coal’s grew by 15% to €150bn and power grew by 10% to €101bn. Emissions fell by 17% to €17bn. Total values were 2% down at €416bn.

IntercontinentalExchange (ICE) continued its “crushing lead” in gas trading, with a share of 1H 2016 volumes of 91%, followed by Leipzig-based EEX Group with 9%, and Chicago-based CME third on 1%.

CME was the winner in coal trading, booking 61% of total 1H volumes, while ICE had 39%.

For power, the market was more dispersed: EEX had 53% share of traded volume, Nasdaq Commodities 23%, while EEX’s 51%-owned affiliate EPEX Spot had 7%.  For emissions trading, ICE collared 94% of volumes in 1H2016, ahead of EEX 4% and CME 2%.

The 50-page report ‘European Energy Exchange Markets 2016’ found that exchange-based forward contracts accounted for 71% of gas traded volume in 1H 2016, followed by OTC (over the counter) trading at 25%, while spot markets – meaning very prompt delivery – accounted for 4% of total traded gas volumes in western Europe.

It also found the indicative value of the Big Four platforms (ICE, CME, EEX, Nasdaq) together for coal, gas, power and emissions markets combined was €390bn and their market value was 94%.

Mark Smedley