Review of the First Half of 2018: EEX Group growth story continues

Review of the First Half of 2018: EEX Group growth story continues

Power market bounces back - significant increase in volumes on the gas and emissions markets

In the first half of 2018, EEX Group significantly increased trading volumes in its biggest markets and as a result, continued its growth path. On the power market, which faced significant regulatory uncertainty last year, EEX Group was again able to increase volumes. Furthermore the Natural Gas and Emission Allowance markets also achieved significant gains. In addition, EEX Group launched further measures in the smaller market segments for Agricultural products and Global Commodities with a view to strengthening its global position.

Peter Reitz, CEO of EEX, explains: “These results clearly show that we have successfully dealt with the challenges of 2017 demonstrating that we are now firmly back on track. In the first half of 2018, we achieved strong results on our power, gas and emissions trading markets.”

The Group’s Power Spot Markets, which are operated by EPEX SPOT, contributed 288.4 TWh to this result – a 7% increase as against the previous year (1st half of 2017: 270.4 TWh). On the Day-Ahead Markets, EPEX SPOT achieved growth of 5% to 247.5 TWh (1st half of 2017: 235.7 TWh) with the Dutch (+18% as against H1/2017) and the French (+15%) Day-Ahead Markets in particular, developing very positively. On the power intraday markets, 40,9 TWh were traded, which is an increase of 18% as against the previous year (1st half of 2017: 34.7 TWh).

The European Power Derivatives Markets of EEX Group have also bounced back in the first half year. The total volume rose by 4%, with volumes on the French (136.3 TWh, +36%), Italian (264.4 TWh, +60%) and Spanish market (45.3 TWh, +40%), in particular, developing very positively. In line with this, the market shares in Italy (82%, H1/2017: 68%), Spain (54%, H1/2017: 38%) and France (33%, H1/2017: 28%) also rose significantly. The volume in the German Phelix-DE Future has increased continuously since its launch in April 2017 totalling 900.8 TWh in the first half of the year. As a result, EEX has succeeded in establishing the Phelix-DE Future as the new benchmark for power derivatives trading in Europe. In addition, the newer markets in eastern and central Europe (31.4 TWh, +269%) and the Netherlands (18.9 TWh, +244%) are increasingly gaining in importance.

On the North American power markets of Nodal Exchange, which has been part of the group since May 2017, industry volume was down in the first half of 2018. Nodal Exchange’s volume was 487.0 TWh in the first half of 2018 compared with a volume of 575.0 TWh in the same period in 2017 (volume from May to June 2017: 131.4 TWh). While the North American power market has declined in size in the past 12 months, Nodal has grown its position, achieving a 20% market share in the past 6 months, up from 16% in 2017.

In the first half of 2018, the PEGAS Natural Gas markets which are operated by Powernext achieved a growth rate of 3% with a volume of 958.7 TWh (2017: 929.1 TWh). Significant increases on the Gas Spot Markets, in particular, contributed to this growth (569.5 TWh, +38%). The Dutch (185.0 TWh, +71%), Austrian (41.3 TWh, +35%) and Belgian market areas (29 TWh, +38%), in particular, developed very positively. In doing so, PEGAS further strengthened its role in natural gas spot trading. The total trading volume on the Gas Derivatives Market was 387.9 TWh (1st half of 2017: 515.7 TWh), driven by the Dutch market area with 313.4 TWh. The Austrian CEGH market, which has consistently progressed over the first six months of 2018, followed with 21.2 TWh, becoming the most important hub on the PEGAS derivatives segment after TTF.

On the markets for Emission Allowances, the total volume was 1,508.7 million tonnes of CO2, more than doubling the volumes achieved in the same period last year (1st half of 2017: 649.1 million tonnes of CO2). This volume included 434.6 tonnes of CO2 from the primary market auctions (1st half of 2017: 427.3 million tonnes of CO2). On the secondary markets, EEX was able to significantly strengthen its overall position: On the Spot Market, volumes rose by 67% to 62.7 million tonnes of CO2 (previous year: 37.6 million tonnes of CO2). The volume on the Derivatives Market increased by more than five times to 1,011.2 million tonnes of CO2 (2017: 183.7 million tonnes of CO2). Trading in EUA futures rose to 515.0 million tonnes of CO2 (2017: 183.4 million tonnes of CO2) while EUA options generated a volume of 496.2 million tonnes of CO2 (1st half of 2017: 0.3 million tonnes of CO2). The recent development in the secondary market also underpins the successful cooperation of EEX with IncubEx in business development and sales for environmental markets.

In the first half of the year, a volume of 24,900 contracts (H1/2017: 34,489) was traded on the Agricultural Markets. Furthermore, with the liquid milk future, EEX will launch a new product for price hedging specifically for dairy plants and milk producers in mid-August 2018. Within the Global Commodities segment, 119,255 contracts were traded in freight in the first half of the year (1st half of 2017: 257,122 contracts).

Reitz concludes: “Our ultimate goal is to enter the global commodity exchange space and we have made significant progress in realising this ambition in the past months. We have made a number of key developments in Asia and in North America which we will continue to further build upon. We’re convinced that the combined offering of EEX Group benefits our customers in the energy and commodity business worldwide.”

EEX Group provides market platforms for energy and commodity products across the globe and provides access to a network of more than 500 trading participants. The group offers contracts for energy, environmental products, freight, metal and agriculturals listed at the European Energy Exchange, EPEX SPOT, Powernext, Cleartrade Exchange, Power Exchange Central Europe (PXE) and Nodal Exchange. Clearing and settlement of the transactions are provided by the European Commodity Clearing (ECC) and by Nodal Clear in the United States. EEX is a member of Deutsche Börse Group. More information: www.eex-group.com.