Trayport's Crombie Cryan examines the key trends and movements in the European commodity markets during 2012.
1. UK Gas: The Rise of Exchange Execution
- A Game of Two Halves
H1 2012 saw a fairly stable market composition
for UK Gas – a continuation of YE 2011. H2 2012 saw a
surge in exchange activity, with exchange executions grabbing a
record month share in November. During December 2012 this trend
reversed, with market composition settling back to H1 2012
The result: FY 2012 vs FY 2011 saw exchange
executions gaining a small share at the sole expense of broker
2. Coal: Dodd-Frank and the Shift to
While the major European coal markets of API2 and
API4 began the year as majority cleared, we end the year with a
market that is almost fully cleared. This shift to clearing
became apparent during September and October this year
– the month prior and the month of the key Dodd-Frank
implementation date of 12 October 2012. Based on current data,
the majority of this is traded as swaps but there is a growing
proportion of block futures executed at both exchange
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