datawatch december 2014
DESCRIPTION
In this month’s issue, the editorial letter discusses the how the US 2015 annual budget shows increased support for nuclear power and fossil fuels and waning investment in renewables and environmental initiatives. The “In Depth” article explores the implications of the broad-scale convergence of power and LNG markets in North America and Europe. The article explains how these shifting markets present new data management challenges. Numerous short articles provide updates on a stronger exchange relationship between the Middle East and China, the extension of EEX’s portfolio to include agriculture markets, and more.TRANSCRIPT
Converging Power and Natural Gas Markets Raise More
Questions for Data Management By Peadar Walsh
Powered byNew products and data sources
Delisting of products and data sources
Potential impact on data
Changes to data attributes, replacement of products
DECEMBER 2014
December 2014
Editorial 4The New US Budget: The Energy Sector Becomes More “All of the Above”
Power 6Platts Launches US Southeast and West Electricity Assessments 6CME Lists New Power Options Contracts 7EEX Launches Greek Power Futures 7Platts Discontinues Assessments in North American Bilateral Electricity Markets 8NYMEX Delists Options for PJM, NE-ISO, and MISO 8CME Amends Eight NYMEX Electricity Products 9
Petroleum 10 Platts to Launch Weekly Turkey Mid-Sulfur Petcoke Assessment 10Platts to Launch Palm Oil/Gasoil Spread Assessment at Singapore Close 10Platts Launches FOB ARA Solvent and Virgin Xylene Assessments 11Platts Launches Daily European OX Assessment 11Platts Adds Export ULSD Assessments Page to PGA Service 11Platts Adds New US Gulf Coast Clean Tanker Assessments to Marine Alert 11Platts Launches Ultra Low Sulfur Diesel Export Cargoes 12Platts Launches New US Clean Tanker Assessments from US Gulf Coast 12Platts Launches USGC-North Brazil Clean Tanker Assessment 13Platts Launches M+4 Cash BFOE Assessment 14Argus Introduces New Assessments for US Heating Oil and Fuel Oil 15CME Permits New Block Trades in Gasoline Euro-Bob Oxy New Barges Options 15CME Lists New Argus LLS vs. Brent Crude Oil Financial Futures 15CME Introduces New LLS Argus BALMOs Futures Contracts 16ICE Adds Mini Brent Crude Futures Contract for ICE Futures Singapore and ICE Clear Singapore 17Platts to End NEW MIBK, Acetone T1 Assessments 17Platts to Discontinue Q1, Q2 Benzene Assessments 18Platts to End Some UKC, Mediterranean, Black Sea, and Caribbean Clean Tanker Assessments 18Platts Stops Publishing Latin America ARPEL Postings 19Platts Discontinues New Methyl Isobutyl and Acetone T1 20NYMEX Delists Select Contract Months of NY Harbor ULSD vs. Gasoil Futures 20NYMEX Amends ICE Gasoil Contract Titles 20Argus Adds Second Month to NYMEX CMA 21Natural Gas 22 Platts to Launch LNG Atlantic FOB Marker 22Platts Launches Columbia Gas, Appalachia Listings 23Argus Adds New Assessments to Argus Natural Gas Americas 23Argus Adds New Series to Argus European Natural Gas Publication and Data Module 25Argus Adds New LPG Assessments for Americas 26Argus Removes Assessments from Argus Natural Gas Americas 27PEGAS Migrates EEX Natural Gas Business to Powernext 28Argus Changes Descriptions for Argus International LPG Data Feed 28Argus Updates Codes for Argus NGL Americas Data Feed 28Argus Updates Description in Argus Russian LPG and Condensate Data Module 29
Coal 30 Platts to Publish CME Open Interest for US OTC Coal 30Platts to Publish US OTC Coal Front-Month, Quarter Averages 31Platts Launches New Dry Bulk Panamax Assessment for Coal Trade Route 31Argus Introduces New Metallurgical Coke Price Series to Argus Steel Feedstocks Publication 31Argus Adds New Coal Assessments to Argus Coal Daily International 32Argus Introduces New Coal-Based Assessments to Argus Freight 32Platts Proposes Discontinuing CAPP 1% vs. Compliance Coal Spread 33Argus Revises Codes for Argus Coal Daily International 33CME Group Expands Contract Month Listing for Indonesian Coal Futures Contract 35Softs and Metals 36 Platts Launches Supramax, Handysize Dry Bulk Assessments 36Platts Launches New Dry Bulk Panamax Assessment on Grain Trade Routes 36Argus Introduces Month Averages to Fertilizer Index 37
2
Summ
ary
December 2014
Summ
aryICE to Issue New Sugar and Cotton Contracts for ICE Futures Singapore and ICE Clear Singapore 38EEX to Extend Portfolio by Introducing Agricultural Products 38Euronext to Launch Dairy Complex 39Platts to Delist Northwest European SME Biodiesel Assessments 40See the original announcement. 40MGEX to Modify Apple Juice Concentrate Futures Contract 40Platts Launches Turkey ARC Steel Tracker Data 40Platts Launches New Dry Bulk Panamax Assessments on Iron Ore Trade Routes 41Platts Publishes New London Platinum/Palladium Prices 42ICE to Introduce New Gold Contract for ICE Futures Singapore and ICE Clear Singapore 42ICE Launches CDS Index and European Interest Rate Swap Futures 42LME Launches LBMA Platinum and Palladium Prices 43Platts Discontinues China Domestic Pig Iron Price 43Platts Delists China Domestic Stainless CR 201 Price 43CME and CBOT Begin Treasury Futures Contracts and Invoice Spreads 44CBOT Launches Treasury Invoice Swaps 44ICE to List New Chinese Renminbi Futures Contract for ICE Futures Singapore and ICE Clear Singapore 45ICE and Eris Exchange Launches CDS Index and European Interest Rate Swap Futures 45Finance 46Thomson Reuters Launches Malaysian Ringgit and Philippines Peso Trading 46Thomson Reuters Releases StarMine SmartEconomics Forecast Model 46Deutsche Börse Launches New ETF in XTF Segment on Xetra 47Deutsche Börse Launches New SPDR Bond Index on Xetra 47Deutsche Börse Launches New UBS Index ETF on Xetra 47Deutsche Börse Launches PowerShares Equity Index on Xetra 48DCCC Introduces New Indian Rupee Contracts 48TriOptima Launches First Cross Currency Swap Compression in USD/Turkish Lira 49TriOptima Launches First Compression Cycle for Cleared JPY Interest Rate Swaps 49DSE Launches Trading Engine Powered by Nasdaq 49Nasdaq Lists Validea Market Legends ETF 50Euronext Launches the “Euronext Expert Market” 51PIMCO Launches New Active ETF on Xetra 52GFI Launches USD MAC Swaps on RatesMatch 52HKEx Discontinues Trading of Three-Year Exchange Fund Note Futures 52CBOE Enters into Agreement with MSCI Inc. to List Index Options 53ICE Sells Remaining Shares in Euronext 54ICE Completes Acquisition of Majority Stake in Holland Clearing House 54ICE Completes Liffe Transition to ICE Futures Europe 54Bloomberg’s FX Technology Platform Selected by Malaysia Money Brokers Association 55Eurex and GMEX Sign Swap Futures Trading and Clearing Agreement 55China Financial Futures Exchange Signs MOU with Dubai Gold and Commodities Exchange 56Korea Exchange and DME Announce Cooperation 56
Weather and Emissions 57 Argus Removes Emission Assessments from Argus Air Daily 57News from Data Vendors 58 New ZEMA Data Reports – December 2014 58Successful Launch of 15-Minute Intraday Call Auction in Germany 61Speedwell SuperPack Offers Historical Weather Data and Weather Data Feeds 62Opec Member Ecuador Adopts ASCI Price for Crude Exports 63Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX) 64Monthly Market Analysis 65 Crude Oil Brent vs. WTI: Forward Curve (NYMEX) 65North American Natural Gas Spot Prices (ICE) 66Henry Hub Natural Gas Forward Curve (ICE) 67Actual Weather (AccuWeather) 67Electricity: Day-Ahead Prices (ICE) 68
In Depth 69 Converging Power and Natural Gas Markets Raise More Questions forData Management 69
3
4December 2014
The US statesmen’s vision for the energy sector has been under a series of transformations over the last several years. It has been through a few cycles, alternating its focus between fossil fuels and renewables, with everything else in between. Nowadays, fossil fuels are on the uptake.
On December 13, 2014, US Congress passed H.R. 83, the fiscal year 2015 budget. Some of the winners of next year’s national budget are the Pentagon, the Department of Defense, the National Institute of Health, and education. Overall, the Department of Energy’s $10.2 billion budget was largely unchanged; however, the budget featured mixed outcomes of cuts and additions that solidify the trend of renewable and environmental concerns giving way to fossil fuels – some of the Obama administration’s requests for funds have been reversed and others ignored.
The Office of Energy Efficiency and Renewable Energy received a modest increase of $25 million (to $1.937 billion), which nonetheless was about $380 million less than the administration requested. Another denied request was funding for renewable energy research (16% less than President Obama was asking for). Obama was also denied $3 billion he had promised to the Green Climate Fund operating within the framework of the UNFCCC as a mechanism to redistribute money from developed to developing countries to counter climate change. The Environmental Protection Agency (EPA) is losing ground and funding as well: its $8.1 billion budget was cut by $60 million, bringing its staffing to the lowest level since the
EditorialThe New US Budget: The Energy Sector Becomes
More “All of the Above”
5December 2014
Editorial1980s and curbing the agency’s efforts in enforcing some air and water laws. This budget reduction also prohibits the EPA from regulating lead ammunition and mountaintop-removal mining.
On the flip side, Congress was generous to fossil fuels and nuclear power by allocating more than requested by the administration. The bill provides $913 million to support nuclear energy. Fossil fuels research is an especially interesting case. President Obama requested a decrease in funding, from $562 million provided in fiscal year 2014 to $475 million. Instead, Congress increased support by boosting funding $100 million above what was asked. Fossil fuels R&D in 2015 will amount to $571 million. Slowly but surely, federal funding of fossil fuels research has been creeping up, growing by about 50% in the past five years.
All in all, a greater number of Republican representatives in Congress is becoming increasingly successful and inventive. Thus, Obama’s announcement a couple years ago of an “all of the above” energy strategy is playing right into their hands: it is being quoted mostly by these lawmakers when pledging their support for fossil fuels. Needless to say, the President has not referenced this energy strategy for a while.
Meanwhile, the markets do not demonstrate any hesitation about fossil fuels: public
exchanges and brokers have been adding more products where oil, natural gas, and LNG are underlying commodities. In fact, I don’t remember any noticeable additions to environmental products in many months. And it is a safe bet that this state of affairs will not change in the near future.W
EditorOlga GorstenkoPhone: 778-296-4183 Email: [email protected]
Olga Gorstenko
Advertising & Vendor RelationshipsBruce Colquhoun Phone: (604) 790-3299 Email: [email protected] an idea for an article or would like to contribute to an upcoming issue? Write to us at [email protected] get real-time data updates, follow @zedatawatch on TwitterTo access previous issues of ZE DataWatch, go to datawatch.ze.com ZEMA Inquiries Bruce Colquhoun Phone: (604) 790-3299 Email: [email protected]
6December 2014
Platts Launches US Southeast and West Electricity AssessmentsEffective December 1, 2014, Platts has begun publishing new daily assessments for day-ahead electricity delivered in the Southeast and Western US Interconnections.
Platts will be assessing on-peak and off-peak day-ahead, bilateral market assessments for the following delivery locations:
Into GTC: Georgia Transmission Corp. SystemJohn Day: The substation for the John Day Dam in Washington StateNOB: The Nevada-Oregon Border interfacing with the Pacific DC LinePinnacle Peak: A group of substations Northeast of Phoenix, ArizonaWestwing: A substation Northwest of Phoenix, Arizona
The assessments will be expressed in $/MWh and published on Platts Electricity Alert, Platts Market Data, along with Platts Energy Trader and Megawatt Daily.See the original announcement.
For more information on North American electricity prices, view ZEMA, ZE’s data management solution for electricity market participants. ZEMA collects over 30 Platts reports, many of which are major sources of electricity market updates, including the Platts North America Daily Index. To learn more about ZEMA’s data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.
The ZEMA graph below shows hourly ERCOT Nodal Day Ahead LMP pricing from December 16, 2014 – December 24, 2014. The data is represented in $USD/MWh and has a range from around $15 USD/MWh on December 22 to a high of over $55 USD/MWh on December 19. The rise and fall of prices correlates mostly with daily on- and off-peak hours of electricity usage.
Power
© Graph created with ZEMA
7December 2014
CME Lists New Power Options ContractsOn December 8, 2014, the Chicago Mercantile Exchange (CME) listed the following new power options for trading on Globex, ClearPort, and the New York Mercantile Exchange (NYMEX):
Product NameClearing / Floor / Globex / SPAN Code
Series Listing Convention
PJM Western Hub Real-Time Peak Calendar-Month 5 MW Option
JOAGlobex: 1 month. ClearPort/Floor: 60 consecutive months.
PJM Western Hub Real-Time Peak 5 MW Option on Calendar Futures Strip
6OAGlobex: Three one-year strips (January contracts). ClearPort/Floor: Three one-year strips (January contracts).
MISO Indiana Hub (formerly Cinergy Hub) Real-Time Peak 5 MW Option on Calendar Futures Strip
OEAGlobex: One one-year strips (January contracts). ClearPort/Floor: Five one-year strips (January contracts).
PJM Western Hub Real-Time Peak Calendar-Month 50 MW Option
PMAGlobex: 18 consecutive months. ClearPort/Floor: The current year plus the next five calendar years.
PJM Northern Illinois Hub Real-Time Peak Calendar-Month 5 MW Option
OUAGlobex: 1 month. ClearPort/Floor: The current year plus the next four calendar years.
MISO Indiana Hub (formerly Cinergy Hub) Real-Time Peak Calendar-Month 5 MW Option
OYAGlobex: 1 month. ClearPort/Floor: The current year plus the next four calendar years.
ISO New England Day-Ahead Peak Calendar-Month 5 MW Option
INEGlobex: 1 month. ClearPort/Floor: The current year plus the next five calendar years.
All options are 5MW except for PJM Western Hub Real-Time Peak Calendar-Month, which is 50MW.See the original announcement.
EEX Launches Greek Power FuturesOn December 1, 2014, the European Energy Exchange (EEX) launched the Trade Registration service of financially fulfilled Greek Power Futures. First trades were registered for delivery in January 2015, concluded between Ezpada s.r.o. and Gunvor International B.V., Geneva Branch, and matched by the broker ICAP. The volume comprised 744 MWh each, traded at a price of EUR 59.00 per MWh and EUR 59.25 per MWh.
With the new service, EEX participants are able to trade financial month, quarter, and year contracts for Greek Power, which clear on the exchange. The entry into the Greek market is of particular interest for customers that are already trading Italian Power Futures on EEX, as both power markets are physically connected.See the original article.
ZEMA collects a range of European power market data, including over 30 records from the EEX. These records include futures price and trading data. To learn more, visit http://www.ze.com/the-zema-solutions/.
Power
8December 2014
PowerPlatts Discontinues Assessments in North American Bilateral Electricity MarketsEffective December 1, 2014, Platts no longer publishes price assessments for North American bilateral electricity markets that are served by an independent system operator.
Platts North American electricity price assessments were largely redundant with the day-ahead, on-peak and off-peak prices the ISOs publish. Also, ISO auctions provide price transparency for a much larger number of hubs and zones than were traded in the bilateral power markets.
Below are the day-ahead, weekend, and near-term bilateral indexes that Platts has discontinued:• AD Hub• Dominion Hub• Entergy, into• ERCOT, Houston• ERCOT, North• ERCOT, South• ERCOT, West• Illinois Hub• Indiana Hub• MAPP, South• Mass Hub
• Michigan Hub• Minnesota Hub• N.Y. Zone-A• N.Y. Zone-G• N.Y. Zone-J• NI Hub• NP15• Ontario• PJM West• SP15• SPP, North
See the original announcement.
NYMEX Delists Options for PJM, NE-ISO, and MISO Effective December 8, 2014, NYMEX delisted three electricity options, as set out in the table below due to lack of interest.
Contract Code Rulebook Chapter Contract Name
OU 384 PJM Northern Illinois Hub Peak Calendar-Month LMP Option
OY 383MISO Indiana Hub (formerly Cinergy Hub) Peak Calendar-Month LMP option
OE 381 ISO New England Peak Calendar-Month LMP OptionSee the original announcement.
9December 2014
PowerCME Amends Eight NYMEX Electricity ProductsEffective January 18, 2015, CME will amend the termination of trading rules for eight monthly electricity futures contracts as shown in the following table:
Clearing Code
Chapter Monthly FuturesClearing Code
Chapter Corresponding Daily Futures
D7 156
PJM AEP Dayton Hub Day-Ahead LMP Peak Calendar-Month 5 MW Futures
PAP 953PJM AEP Dayton Hub Day-Ahead Peak Calendar-Day 5 MW Futures
R7 157
PJM AEP Dayton Hub Day-Ahead Off-Peak Calendar-Month 5 MW Futures
PEO 954PJM AEP Dayton Hub Day-Ahead Off-Peak Calendar-Day 5 MW Futures
H5 859
MISO Indiana Hub (formerly Cinergy Hub) Day-Ahead Peak Calendar-Month 5 MW Futures
PDD 1074MISO Indiana Hub Day-Ahead Peak Calendar-Day 5 MW Futures
H3 802
MISO Indiana Hub (formerly Cinergy Hub) 5 MW Peak Calendar-Month 5 MW Futures
PTD 1075MISO Indiana Hub Day-Ahead Off-Peak Calendar-Day 5 MW Futures
K2 893
MISO Indiana Hub (formerly Cinergy Hub) Day-Ahead Off-Peak Calendar-Month 5 MW Futures
FAD 1076MISO Indiana Hub Real-Time Off-Peak Calendar-Day 5 MW Futures
H4 803
MISO Indiana Hub (formerly Cinergy Hub) Real-Time Off-Peak Calendar-Month 5 MW Futures
FTD 1077MISO Indiana Hub Real-Time Off-Peak Calendar-Day 5 MW Futures
OPM 960Ontario Peak Calendar-Month Futures
OPD 964Ontario Peak Calendar-Day Futures
OFM 961Ontario Off-Peak Calendar-Month Futures
OFD 965Ontario Off-Peak Calendar-Day Futures
See the original announcement.
10December 2014
Petroleum
Platts to Launch Weekly Turkey Mid-Sulfur Petcoke AssessmentOn February 4, 2015, Platts will launch a new weekly CIF Turkey mid-sulfur petroleum coke assessment. The new assessment will take into account petcoke trades done in a forward 30-60-day delivery window.
Cargoes traded with more prompt or further forward laycans would be normalized to the middle of the assessment period.
The assessment will be normalized to the port of Iskenderun, but will take into account the ports of Izmir, Marmara, and Samsun. The range of petcoke specifications for inclusion in the assessment will be:
Calorific value of 7,000-8,000 kcal/kg NAR, 4-5.5% sulfur content and Hardgrove Grindability Index of 45-55.
The price assessment will be normalized to reflect the price of mid-sulfur petcoke of 5% sulfur content and 50 HGI in Handymax 50,000 mt vessels on a 7,500 kcal/kg NAR calorific value basis.See the original announcement.
ZEMA collects a range of Platts crude oil and petroleum products data. To learn more, visit http://www.ze.com/the-zema-solutions/
Platts to Launch Palm Oil/Gasoil Spread Assessment at Singapore CloseEffective February 2, 2015, Platts will launch an assessment of the palm oil/gasoil spread, which will reflect the value of the first forward month contract for Bursa Malaysia palm oil futures minus the value of front-month ICE gasoil futures.
This assessment will be expressed in US dollars per metric ton and published in the Platts BiofuelScan, and under the code POVGO00 in the Platts database. See the original announcement.
11December 2014
Platts Launches FOB ARA Solvent and Virgin Xylene AssessmentsEffective January 2, 2015, Platts will publish FOB ARA solvent and virgin xylene assessments on a daily basis to capture intra-week liquidity.
The new daily assessments will replace the weekly prices of solvent (PHAAW00) and virgin xylene (PHABD00) published every Friday in the Europe and Americas Petrochemicalscan. These prices can be found on Platts Petrochemical Alert pages PC 328 and PCA 233.See the original announcement.
To receive up-to-date petrochemical price data, utilize ZEMA, ZE’s enterprise data management solution. ZEMA collects data from many Platts reports containing information on petroleum products. To learn more, visit http://www.ze.com/the-zema-solutions/data/.
Platts Launches Daily European OX AssessmentEffective January 2, 2015, Platts published FOB ARA orthoxylene assessments on a daily basis in order to capture intra-week liquidity.
Currently, Platts publishes weekly assessment for orthoxylene (PHABK00) on Fridays.
This assessment can be found on Platts Petrochemical Alert on page PCA332 and in the Europe and Americas Petrochemicalscan.See the original announcement.
Platts Adds Export ULSD Assessments Page to PGA ServiceOn December 15, 2015, Platts added a new daily assessment page to Platts Global Alert (PGA), its real-time information service for the oil markets, to accommodate newly launched assessments for export ULSD.
This new page, PGA page 434, carries Platts Export ULSD assessment in both cents/gallon and dollars/metric ton.
These assessments, which were launched on December 1, also appear on PGA page 481, alongside other US diesel assessments.See the original announcement.
ZEMA, ZE’s data management solution for oil market participants, collects over 650 oil records on a daily basis. To learn more about how to leverage ZEMA’s rich library of oil market intelligence, visit http://www.ze.com/the-zema-suite/.
Platts Adds New US Gulf Coast Clean Tanker Assessments to Marine AlertOn December 1, 2014, Platts added a new daily assessment page to Platts Marine Alert, its real-time information service for the shipping markets, to accommodate newly launched assessments for Long Range clean tankers from the US Gulf Coast.
Petroleum
12December 2014
These assessments—reflecting 65,000-80,000 dwt LR1 tankers carrying clean products from the US Gulf Coast to UK Continent and the Mediterranean—can be found on PGT page 1,924. Both assessments, and the page, were launched on the same date. See the original announcement.
Platts Launches Ultra Low Sulfur Diesel Export CargoesEffective December 1, 2014, Platts has launched a FOB USGC Export ULSD assessment which reflects EN590 quality diesel with a typical standard clip size of 300,000 barrels and a typical operational tolerance of plus/minus 10%. The assessment reflects cargoes loading seven to 21 days forward from the date of publication, subject to industry standard terminal and vessel nomination procedures. Export ULSD should be free of any biofuels.
Loading locations include terminals along the US Gulf Coast from Corpus Christi, Texas, to Pascagoula, Mississipi, normalized to a Houston basis.
The FOB USCGC Export ULSD assessment does not include the value of Renewable Volume Obligations (RVOs), which reflect the cost of supplying RINs with fuel when mandated by the US Environmental Protection Agency as part of the Renewable Fuel Standard. RVOs are the amount of renewable fuels to be blended into transportation fuels for US domestic consumption.
The new assessment was published as an outright value in both cents/gallon and $/mt. The value of any cargoes trading as a differential to prompt pipeline ULSD will be assessed by calculating a forward value for pipeline diesel to align with the 7-21 day Export ULSD assessment window.See the original announcement.
ZEMA collects over 300 data reports on petroleum and other liquids from Platts alone. To learn more, visit http://www.ze.com/the-zema-solutions/data/.
Platts Launches New US Clean Tanker Assessments from US Gulf CoastOn December 1, 2014, Platts launched new clean Long Range 1 tanker freight rate assessments, reflecting flows from US Gulf Coast to UK Continent, following a proposal to do so published in October 2014.
The new assessments capture newly established supply trends of refined products out of the region following significant structural changes to the US oil industry and reflect shifting trading patterns. The new assessments reflect modern LR1 tonnage no more than 15 years old.
The assessments are published on a Worldscale basis to reflect how these routes are traded. Platts also publishes a dollars per metric ton value for these routes.
Petroleum
13December 2014
The assessments are:
US Gulf Coast to UK Continent
This assessment is based on a 65,000-80,000 dwt LR1 tanker carrying a 60,000 mt cargo of clean products from the US Gulf Coast to UK Continent, and reflects the increased amount of refined products leaving the US Gulf Coast. The assessment includes loadings from New Orleans and Houston and discharge at Rotterdam and Antwerp.
US Gulf Coast to Mediterranean
This assessment is based on a 65,000-80,000 dwt LR1 tanker carrying a 60,000 mt cargo of clean products from the US Gulf Coast to the Mediterranean, and reflects the increased amount of refined products leaving the US Gulf Coast. The assessment includes loadings from New Orleans and Houston and discharge at Lavera and Genoa.
See the original announcement.
Platts Launches USGC-North Brazil Clean Tanker AssessmentOn November 24, 2014, Platts launched a new clean Medium Range tanker freight rate assessment reflecting flows from US Gulf Coast to North Brazil, following a proposal to do so published in October 2014.
The new assessment captures newly established supply trends of refined products out of the region following significant structural changes to the US oil industry. The new assessment reflects modern MR tonnage.
US Gulf Coast to North Brazil
This assessment is published on a Worldscale basis to reflect how this route is most commonly traded. Platts also publishes a dollars-per-metric-ton value for this route.
The assessment reflects the US Gulf Coast to North Brazil route for a clean MR tanker carrying a cargo of 38,000 mt. The assessment reflects loadings from Houston and New Orleans and discharge at ports including Manaus, Belem, and Sao Luis. See the original announcement.
ZEMA collects nearly 50 data reports on freight from all over the world. For more information, visit http://www.ze.com/the-zema-solutions/data/.
Petroleum
14
Platts Launches M+4 Cash BFOE AssessmentEffective October 1, 2014, Platts has launched a Cash BFOE assessment to reflect four forward Brent monthly contracts ahead of the month of publication (M+4). The instrument complements Platts existing Cash BFOE assessments, which used to reflect one, two, and three months ahead of the month of publication. Platts also launched an Exchange of Futures for Physical (EFP) assessment to reflect the EFP for M+4 Brent.
The new assessments are published alongside Platts’ existing Cash BFOE and EFP assessments in Platts Crude Oil Marketwire, Platts Oil Price Report, and on Platts Global Alert pages 1210 and 1212.See the original announcement.
The ZEMA graph below illustrates Brent Crude – Last Day Futures, with a forecast date of December 22, 2014, from January 2015 until December 2016. This data is collected from CME and shows a steady increase in oil pricing ranging from approximately $60 USD/bbl to $72 USD/bbl, as shown by the orange threshold filter.
Petroleum
December 2014
© Graph created with ZEMA
15
PetroleumArgus Introduces New Assessments for US Heating Oil and Fuel OilOn November 24, 2014, Argus made changes to the Argus US Products publication and data module. These changes apply to data in the dhp and dhps .csv files in the DUSPR folder on ftp.argusmedia.com.
Argus has reinstated its assessment of New York of New York low-pour 0.3pc S fuel oil (PA0000826). This code was previously stopped on October 22, 2014:
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0000826 2 1, 2 0Fuel oil No 6 0.3% low-pour NYH
Products>Fuel oil>US east coast
Daily
As well, Argus added the following heating oil 500ppm assessments from November 24, 2014:
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015303 21, 2, 6, 7
1, 2, 3Heating oil 500ppm Colonial 75 pipe fob cycle
>Products>Gasoil/Diesel/Heating oil>US Colonial pipeline
Daily
PA0015304 21, 2, 6, 7
0Heating oil 500ppm NYH barge fob prompt
>Products>Gasoil/Diesel/Heating oil>US east coast
Daily
See the original announcement.
CME Permits New Block Trades in Gasoline Euro-Bob Oxy NEW Barges OptionsEffective December 21, 2014, the Chicago Mercantile Exchange (CME) has permitted block trading on Gasoline Euro-bob Oxy NEW Barges (Argus) Average price options with a minimum threshold of five contracts.
A block trade is a privately negotiated futures, options, or combination transaction that meets certain quantity thresholds which are permitted to be executed apart from the public auction market. See the original announcement.
Using ZEMA’s advanced data collection and analytic capabilities, market participants can easily keep track of the new data that will be generated by CME. To learn more, visit http://www.ze.com/the-zema-solutions/.
CME Lists New Argus LLS vs. Brent Crude Oil Financial FuturesEffective December 8, 2014, CME Group listed a new LLS Argus spread against Brent Crude Oil futures contract. Details listed below:
• Trading venues: Globex, ClearPort, and NYMEX Trading Floor• Clearing Floor Code, Globex Code, SPAN Code: LLR
December 2014
16
Petroleum• Product size: 1,000 barrels• Series listing convention: 30 consecutive months• Initial contracts: January 2015 – June 2017• Minimum price increment: 0.01• Value per tick / currency: 1,000 x 0.01 = $10.00• Block Eligible / Minimum Block Quantity: Yes / 5• Financial settlement date: LTD + 2• Delivery: Financially settled
Price Conventions
Trade Prices-7.97-7.96-7.95
ITC Fractional Format -0000797Option Strikes N/AITC Fractional Indicator 2
Globex Prices-797-796-795
Market Data Platform Channel 244See the original announcement.
CME Introduces New LLS Argus BALMOs Futures ContractsOn December 8, 2014, CME Group listed two new futures contracts: LLS Argus vs. Brent Balmo Futures and LLS Argus vs. WTI Balmos Futures. Details listed below:
Product Name Clearing / Floor / Globex Code SPAN CodeLLS (Argus) vs. Brent Balmo Futures LBB LBBLLS (Argus) vs. WTI Balmo Futures LWB LWB
• Trading venues: Globex, ClearPort, and NYMEX Trading Floor• Product size: 1,000 barrels• Series listing convention: One month and the following month listed 10 business days prior
to the start of the contract month• Initial contracts: January 2015• Minimum price increment: 0.01• Value per tick / currency: 1,000 x 0.01 = $10.00• Block Eligible / Minimum Block Quantity: Yes / 5• Financial settlement date: LTD + 2• Delivery: Financially settled
December 2014
17
PetroleumPrice ConventionsTrade Prices LBB: -1.73
LWB: 3.47ITC Fractional Format LBB: -0000173
LWB: 0000347Option Strikes N/AITC Fractional Indicator 2Globex Prices LBB:-173
LWB:347Market Data Platform Channel
244
See the original announcement.
ZEMA collects many reports from the Chicago Mercantile Exchange regarding Chicago Board of Trade financial information, including the CBOT Futures daily price report. To learn more about how to transform this collected data into useful market intelligence, visit http://www.ze.com/the-zema-suite/market-analyzer/
ICE Adds Mini Brent Crude Futures Contract for ICE Futures Singapore and ICE Clear SingaporeEffective March 17, 2015, Intercontinental Exchange (ICE) will list a mini ICE Brent crude futures contract, which will be among the first to be listed for trading and clearing at ICE Futures Singapore and ICE Clear Singapore, subject to regulatory approval from the Monetary Authority of Singapore (MAS). The contract will be cash settled.
This new futures contract will complement ICE’s existing portfolio of benchmark contracts, which includes ICE’s Brent contracts.
ICE Trade Vault, LLC has submitted a foreign trade repository application to MAS, which will further support market participants’ compliance with regulatory reform in the region. See the original announcement.
Platts to End NEW MIBK, Acetone T1 AssessmentsEffective April 1, 2015, Platts will discontinue its NWE methyl isobutyl (MIBK) and acetone T1 assessments. This decision note supersedes the previous note published on November 28, 2014, and alters the effective date.
Following a comprehensive review of feedback, Platts reconsidered its initial proposal published June 10, 2014, to also discontinue price assessments for methyl ethyl ketone (MEK) and will continue to publish weekly assessments for that product.
The assessments, which are to be discontinued, are found under the following codes in the Platts price database:
• Acetone T1 FOB Rotterdam PHADK00 Monthly average: PHAYM03
December 2014
18
• MIBK FD NWE Eur/mt HPADX00 Monthly average: HPAYW03 • MIBK FOB Rotterdam PHADY00 Monthly average: PHAYV03See the original announcement.
Platts to Discontinue Q1, Q2 Benzene AssessmentsEffective April 1, 2015, Platts will discontinue its Q1 and Q2 CIF ARA benzene assessments. This decision note supersedes the previous note, published on November 10, 2015, and alters the effective date.
These benzene assessments to be discontinued are currently published on page PCA60 and found under the following codes in the Platts price database:
• Benzene CIF ARA Q1 USD AAIBN00 Monthly Average: AAIBO00 • Benzene CIF ARA Q2 USD AAIBP00 Monthly Average: AAIBQ00
Following a comprehensive review of feedback, Platts reconsidered its initial proposal published April 6, 2014, to also discontinue its T2 FOB ARA toluene assessment and will continue to publish daily assessments.
These toluene assessments are published on page PCA233 and page PCA377 and are found under the following codes in the Platts price database:
• Toluene T2 FOB ARA PHAFW00 Monthly Ave: PHBFM03 Weekly Ave: PHAFV04 • Toluene T2 FOB ARA Mo01 AAXOK00 Monthly Ave: AAXOK03 Weekly Ave: AAXOK04 • Toluene T2 FOB ARA Mo02 AAXOL00 Monthly Ave: AAXOL03 Weekly Ave: AAXOL04 See the original announcement.
Platts to End Some UKC, Mediterranean, Black Sea, and Caribbean Clean Tanker AssessmentsOn April 1, 2014, Platts will discontinue a series of assessments for clean tanker spot market rates in markets where the movement of clean petroleum products has changed substantially or no longer occurs.
These assessments reflect certain shipping routes and sizes from the UK Continent, Mediterranean, Black Sea and Caribbean to various destinations. The proposed discontinuations reflect the fact that clean petroleum products flows have changed significantly in the market at large, and these routes no longer reflect most typical trading patterns.
A full table showing affected assessments is provided below.
December 2014
Petroleum
19
Discontinuations from UKC Origin PointsCodes AssessmentsPFAMW00 Clean UKC-South America MR Lumpsum Basis (30kt) DailyPFARU03 Clean UKC-South America MR Lumpsum Basis (30kt) MAVGTCACD00 Clean UKC-South America MR $/mt (30kt) DailyTCACD03 Clean UKC-South America MR $/mt (30kt) MAVGPFAMWSZ Clean UKC-South America MR cargo sizePFAMN00 Clean UK Continent-UK Continent LR Worldscale Basis (60kt) DailyPFARP03 Clean UK Continent-UK Continent LR Worldscale Basis (60kt) MAVGTCABW00 Clean UK Continent-UK Continent LR $/mt (60kt) DailyCodes AssessmentsTCABW03 Clean UK Continent-UK Continent LR $/mt (60kt) MAVG PFAMNSZ Clean UK Continent-UK Continent LR cargo sizePFAMO00 Clean UK Continent-Mediterranean LR Worldscale Basis (60kt) DailyPFARQ03 Clean UK Continent-Mediterranean LR Worldscale Basis (60kt) MAVGTCABU00 Clean UK Continent-Mediterranean LR $/mt (60kt) DailyTCABU03 Clean UK Continent-Mediterranean LR $/mt (60kt) MAVGPFAMOSZ Clean UK Continent-Mediterranean LR cargo size
Discontinuations from Med and Black Sea Origin PointsCodes AssessmentsPFALA10 Clean Med-South America MR Lumpsum Basis (30kt) DailyAAAUS00 Clean Med-South America MR Lumpsum Basis (30kt) MAVGTCACH00 Clean Med-South America MR $/mt (30kt) DailyTCACH03 Clean Med-South America MR $/mt (30kt) MAVGPFALASZ Clean Med-South America MR cargo sizePFALB10 Clean Black Sea-South America MR Lumpsum Basis (30kt) DailyAAAUO00 Clean Black Sea-South America MR Lumpsum Basis (30kt) MAVGTCACJ00 Clean Black Sea-South America MR $/mt (30kt) DailyTCACJ03 Clean Black Sea-South America MR $/mt (30kt) MAVGPFALBSZ Clean Black Sea-South America MR cargo size
Discontinuations from Caribbean Origin PointsCodes AssessmentsPFAMY00 Clean Caribbean-South America MR Worldscale Basis (38kt) DailyPFAQJ03 Clean Caribbean-South America MR Worldscale Basis (38kt) MAVG TCACN00 Clean Caribbean-South America MR $/mt (38kt) DailyTCACN03 Clean Caribbean-South America MR $/mt (38kt) MAVGPFAMYSZ Clean Caribbean-South America MR cargo size
See the original announcement.
Platts Stops Publishing Latin America ARPEL PostingsEffective January 2, 2015, Platts has stopped publishing consumer price postings in Latin America as gathered by the Asociacion Regional de Empresas del Sector Petroleo (ARPEL).
The decision reflects diminished appetite for the data from Platts subscribers and follows a proposal first published on October 31, 2014, to stop publishing this data.See the original announcement.
December 2014
Petroleum
20
Platts Discontinues New Methyl Isobutyl and Acetone T1Effective January 2, 2015, Platts has discontinued its NWE methyl isobutyl (MIBK) and acetone T1 assessments from January 2, 2015.
Following a comprehensive review of feedback, Platts reconsidered its initial proposal published June 10 to also discontinue price assessments for methyl ethyl ketone (MEK) and will continue to publish weekly assessments for that product.
The assessments, which have been discontinued, are found under the following codes in the Platts price database:
Acetone T1 FOB Rotterdam PHADK00M Monthly Average PHAYM03MIBKFD NEW Eur/mt HPADX00 Monthly Average HPAYW03MIBK FOB Rotterdam PHADY00 Monthly Average PHAYV03
See the original announcement.
NYMEX Delists Select Contract Months of NY Harbor ULSD vs. Gasoil FuturesEffective December 8, 2014, the New York Mercantile Exchange (NYMEX) delisted from trading previously-listed contract months of the NY Harbor ULSD vs. Gasoil Futures contract. There was no open interest in the delisted contract months.
The details are summarized in the following table:
Contract Title /Rulebook Chapter
Commodity Code
Listing Schedule Prior to December 8, 2014 – CPC, Globex, and NX Pit
Listing Schedule as of December 9, 2014 – CPC, Globex, and NX Pit
Contract Months Delisted as of December 8, 2014
NY Harbor ULSD vs. Gasoil Futures/725
CPC/NX Pit HA Globex: HAB
Current year + 1Monthly contracts up to and including December 2014
January 2015 contract month and beyond
See the original announcement.
NYMEX Amends ICE Gasoil Contract TitlesEffective January 5, 2015, NYMEX amended the product titles of a series of ICE Gasoil based futures and options contracts to ICE Low Sulfur Gasoil to reflect corresponding amendments to the underlying ICE gasoil futures contract.
NYMEX also amended all references to the contracts throughout the NYMEX rulebook and CME Group website to reflect the new naming convention. Minor textual adjustments include clarifications to the floating price rules.
It is important to note that the title changes and all related amendments is administrative in nature and will, in no manner, impact the structure of the contract or related contracts.See the original announcement.
December 2014
Petroleum
21
Argus Adds Second Month to NYMEX CMA On December 1, 2014, Argus added a new price series to the Argus Americas Crude publication and data module. These changes apply to data in the DHC module in the DCRDEUS folder on ftp.argusmedia.com. A second forward month for NYMEX CMA month has been added to the following:
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0010005 2 8 2NYMEX CMA month
>Crude>North America>Canada Daily
See the original announcement.
December 2014
Petroleum
22
Nat GasNatural GasPlatts to Launch LNG Atlantic FOB MarkerOn January 20, 2015, Platts will launch an additional marker to reflect the FOB value of LNG cargoes originating from the East Atlantic.
The new assessment is called the East Atlantic Market (EAM). It is intended to reflect a transactable value of spot LNG cargoes, freight normalized to a Huelva/Gibraltar loading with a laycan corresponding to the current and front month in half-month increments drawing on volumes originating from the following primary and re-export locations in both North West and South West Europe including the Mediterranean, including FOB cargoes sold on a ship-to-ship transfer basis. Production regions are also included such as Nigeria, Angola, Algeria and Norway. LNG DES spot transactions, traded in other regions including Middle East and Asia, along with Atlantic delivery to Brazil and Argentina, may be considered in the assessment process when and where appropriate.
The assessment process is in line with existing Platts LNG methodology.See the original announcement.
ZEMA collects over 30 Platts records, including many natural gas records. To gain more informed insight regarding Platts’ natural gas assessments, view ZEMA’s Platts records and natural gas records. To learn more, visit http://www.ze.com/the-zema-solutions/.
The ZEMA graph below illustrates Henry Hub Natural Gas Futures data from January 2015 until December 2016, with a forecast date of December 23, 2014. With a high of approximately $3.85 USD/MMbtu in December 2016 and a low of approximately $3.1 USD/MMbtu in April 2015, pricing generally increases between January 2015 and December 2016. This data is collected from forward curve analyses from a CME data report.
December 2014
© Graph created with ZEMA
23
Natural GasPlatts Launches Columbia Gas, Appalachia ListingsEffective January 2, 2015, Platts added to its daily and monthly bidweek price surveys sub-listings for Columbia Gas, Appalachia deliveries.
Prices in the Columbia Gas Transmission system have bifurcated between those that are part of the Columbia Gas Interruptible Paper Pool (IPP) and those that are not (Non-IPP).
The description for the new location is:
Columbia Gas, Appalachia (Non-IPP)
Deliveries to Columbia Gas Transmission from on-system production locations that are restricted from Columbia’s IPP pool (TCO pool). This pricing location does not include transactions for gas delivered to Columbia from interconnects with other interstate pipeline systems.
See the original announcement.
Argus Adds New Assessments to Argus Natural Gas AmericasOn January 2, 2015, Argus added the following new series to the Argus Natural Gas Americas publication. The following PA code details can be found in the dnga in the DNGA folder on ftp.argusmedia.com:
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015302 2 17, 3 0Natural gas hub Florida Gas zone 2 day-ahead index month average
>Natural gas> North Ameri-ca>Gulf/Texas
Monthly
PA0015292 2 17, 3 0Natural gas hub Transco zone 6 nonNY North day-ahead index month average
>Natural gas>North America>East
Monthly
See the original announcement.
On December 1, 2014, Argus introduced the following new codes to the same publication:
PA-codeTime stamp
Price type
Continuous forward
Description Unit Category Frequency
PA0015291 2 3, 4 0Natural gas hub Trans-co zone 6 nonNY North day-ahead Index
USD/mnBtu
Natural gas>North Ameri-ca>East
Daily
PA0015293 2 8 0
Natural gas hub Transco zone 6 nonNY North day-ahead no of trades
No Unit
Natural gas>North Ameri-ca>East
Daily
PA0015294 2 29 0
Natural gas hub Trans-co zone 6 nonNY North day-ahead traded volume
mnBtu
Natural gas>North Ameri-ca>East
Daily
December 2014
24
Natural GasPA-code
Time stamp
Price type
Continuous forward
Description Unit Category Frequency
PA0015295 2 1 0Natural gas hub Trans-co zone 6 nonNY North day-ahead mid-range
USD/mnBtu
Natural gas>North Ameri-ca>East
Daily
PA0015296 2 1 0Natural gas hub Trans-co zone 6 nonNY North day-ahead
USD/mnBtu
Natural gas>North Ameri-ca>East
Daily
PA0015297 2 1 0Natural gas hub Trans-co zone 6 nonNY North bid week
USD/mnBtu
Natural gas>North Ameri-ca>East
Monthly
PA0015298 2 4 0Natural gas hub Trans-co zone 6 nonNY North Index bid week
USD/mnBtu
Natural gas>North Ameri-ca>East
Monthly
PA0015299 2 8 0Natural gas hub Trans-co zone 6 nonNY North no of trades bid week
No Unit
Natural gas>North Ameri-ca>East
Monthly
PA0015300 2 29 0
Natural gas hub Trans-co zone 6 nonNY North traded volume bid week
mnBtu
Natural gas>North Ameri-ca>East
Monthly
PA0015301 2 4 0Natural gas hub Trans-co zone 6 nonNY North everyday Index
USD/mnBtu
Natural gas>North Ameri-ca>East
Daily
As well, the following codes, which were previously made inactive, have resumed publication:
PA-codeTime stamp
Price type
Continuous forward
Description Unit Category Frequency
PA0006093 2 3, 4 0Natural gas hub Florida Gas zone 2 day-ahead Index
USD/mnBtu
>Natural gas>North America>Gulf/Texas
Daily
PA0006095 2 8 0
Natural gas hub Florida Gas zone 2 day-ahead no of trades
No Unit
>Natural gas>North America>Gulf/Texas
Daily
PA0006096 2 29 0
Natural gas hub Florida Gas zone 2 day-ahead traded volume
mnBtu
>Natural gas>North America>Gulf/Texas
Daily
December 2014
25
Natural GasPA-code
Time stamp
Price type
Continuous forward
Description Unit Category Frequency
PA0006097 21, 2, 8
0Natural gas hub Florida Gas zone 2 day-ahead
USD/mnBtu
>Natural gas>North America>Gulf/Texas
Daily
PA0006242 21, 2, 8
0
Natural gas hub Florida Gas zone 2 day-ahead mid-range
USD/mnBtu
>Natural gas>North America>Gulf/Texas
Daily
PA0008952 2 4 0Natural gas hub Florida Gas zone 2 everyday Index
USD/mnBtu
>Natural gas>North America>Gulf/Texas
Daily
See the original announcement.
ZEMA collects Argus natural gas data on a daily basis from over 14 records. To learn more about ZEMA, book a complimentary demonstration today at http://www.ze.com/book-a-demo/.
Argus Adds New Series to Argus European Natural Gas Publication and Data ModuleEffective December 19, 2014, Argus added the following new series to the Argus European Natural Gas publication and data module. The following PA code details can be found in the DNG module in the DENG folder on ftp.argusmedia.com.
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015353 6 1, 2 0Natural gas PSV Eur/MWh weekend
>Natural gas> Europe>PSV
Weekly
PA0015354 6 8 0Natural gas PSV-NCG Eur/MWh Basis weekend
>Natural gas> Europe>PSV> Natural gas> Europe>NCG
Weekly
PA0015355 6 8 0Natural gas PSV-TTF Eur/MWh Basis weekend
>Natural gas> Europe>PSV> Natural gas> Europe>TTF
Weekly
See the original announcement.
December 2014
Natural Gas
26December 2014
Argus Adds New LPG Assessments for AmericasOn December 8, 2014, Argus added new series to the Argus NGL Americas data module. These changes apply to the dngl file in the DNGL folder of ftp.argusmedia.com.
Details are as follows:
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015325 2 8 0Propane Mt Belvieu Enterprise percentage of WTI
>LPG> Americas> Propane
Daily
PA0015326 2 8 0Propane Mt Belvieu LST percentage of WTI
>LPG> Americas> Propane
Daily
PA0015327 2 8 0Normal butane Mt Belvieu Enterprise percentage of WTI
>LPG> Americas>Butane
Daily
PA0015328 2 8 0Isobutane Mt Belvieu Enterprise percentage of WTI
>LPG> Americas> Isobutane
Daily
PA0015329 2 8 0Isobutane Mt Belvieu LST percentage of WTI
>LPG> Americas> Isobutane
Daily
PA0015330 2 8 0Natural gasoline Mt Belvieu Enterprise percentage of WTI
>LPG> Americas>Natural gasoline
Daily
PA0015331 2 8 0Propane Conway percentage of WTI
>LPG> Americas> Propane
Daily
PA0015332 2 8 0Normal butane Conway percentage of WTI
>LPG> Americas>Butane
Daily
PA0015333 2 8 0Isobutane Conway percentage of WTI
>LPG> Americas> Isobutane
Daily
PA0015334 2 8 0Natural gasoline Conway percentage of WTI
>LPG> Americas>Natural gasoline
Daily
See the original announcement.
ZEMA collects Argus natural gas data, including data from the Argus International LPG record and the Argus LNG Daily record. To learn more about ZEMA, book a free demonstration today at http://www.ze.com/book-a-demo/.
Natural Gas
27
Argus Removes Assessments from Argus Natural Gas AmericasOn December 1, 2014, Argus removed several codes from the Argus Natural Gas Americas publication. These changes apply to the data files in the dnga in the DNGA folder on ftp.argusmedia.com:
PA-codeTime stamp
Price type
Continuous forward
Description Unit Category Frequency
PA0007705 2 3, 4 0
Natural gas hub Clarington day-ahead Index
USD/mnBtu
>Natural gas>North America>East
Daily
PA0007707 2 8 0
Natural gas hub Clarington day-ahead no of trades
No unit>Natural gas>North America>East
Daily
PA0007708 2 29 0
Natural gas hub Clarington day-ahead traded volume
mnBtu>Natural gas>North America>East
Daily
PA0007709 2 1, 2 0Natural gas hub Clarington day-ahead
USD/mnBtu
>Natural gas>North America>East
Daily
PA0007710 2 1, 2 0
Natural gas hub Clarington day-ahead mid-range
USD/mnBtu
>Natural gas>North America>East
Daily
PA0007839 2 1, 2 1Natural gas hub Clarington bid week
USD/mnBtu
>Natural gas>North America>East
Monthly
PA0007840 2 4 1Natural gas hub Clarington Index bid week
USD/mnBtu
>Natural gas>North America>East
Monthly
PA0007841 2 8 1
Natural gas hub Clarington no of trades bid week
No unit>Natural gas>North America>East
Monthly
PA0007842 2 29 1
Natural gas hub Clarington traded volume bid week
mnBtu>Natural gas>North America>East
Monthly
PA0008965 2 4 0Natural gas hub Clarington everyday Index
USD/mnBtu
>Natural gas>North America>East
Daily
See the original announcement.
December 2014
Natural Gas
28
PEGAS Migrates EEX Natural Gas Business to PowernextEffective January 1, 2015, Powernext has become part of the European Energy Exchange (EEX) Group. All Natural Gas markets available on the PEGAS platform are now operated under the Powernext rulebook.
The technical switch of the current EEX gas products into Powernext products within all Powernext gas trading systems was performed on January 5, 2015.
Initial benefits in terms of membership concern the TTF hub: all PEGAS members can ask to trade TTF Spot or Futures with no additional costs, provided they have the according approval from both the Clearing House ECC and their Clearing Member.See the original announcement.
Argus Changes Descriptions for Argus International LPG Data FeedEffective December 5, 2014, Argus has made changes to the Argus International LPG data feed. These changes apply to data found in the dpgus and dpg data files in the \DLPG folder of ftp.argusmedia.com. Descriptions for the following codes have been updated:
PA-code Old Description New Description
PA0000376 Butane Mt Belvieu LST (LDH) monthButane refinery grade Mt Belvieu LST month
PA0008796 Butane Mt Belvieu LST VWA monthButane refinery grade Mt Belvieu LST VWA month
See the original announcement.
Argus Updates Codes for Argus NGL Americas Data FeedEffective December 5, 2014, Argus updated the Argus NGL Americas data feed. These changes apply to data found in the dngl files in the DNGL folder of ftp.argusmedia.com.
Descriptions for the following codes have been updated:
PA-code Old Description New DescriptionPA0000376 Butane Mt Belvieu LST (LDH) month Butane refinery grade Mt Belvieu LST monthPA0003271 Butane Mt Belvieu LST (LDH) wet Butane refinery grade Mt Belvieu LST wet
PA0006718 Butane Mt Belvieu LST MTD average wetButane refinery grade Mt Belvieu LST MTD average wet
PA0006719 Butane Mt Belvieu LST MTD average monthButane refinery grade Mt Belvieu LST MTD average month
PA0008796 Butane Mt Belvieu LST VWA monthButane refinery grade Mt Belvieu LST VWA month
PA0008832 Butane Mt Belvieu LST MTD VWA monthButane refinery grade Mt Belvieu LST MTD VWA month
See the original announcement.
December 2014
Natural Gas
29
Argus Updates Description in Argus Russian LPG and Condensate Data ModuleOn December 5, 2014, Argus made changes to the Argus Russian LPG and Condensate data module. These changes apply to the data files in the drlpg data files in the \DRLPG folder on ftp.argusmedia.com.
The description for the following code will be updated:
PA-code Old Description New Description
PA000049Butane MT Belvieu LST (LDH) monthly avg
Butane refinery grade MT Belvieu LST monthly avg
See the original announcement.
December 2014
30
Platts to Publish CME Open Interest for US OTC CoalOn December 15, 2014, Platts announced a proposal to publish the open interest listed by the CME Group for the front-month CAPP barge, CAPP rail (CSX) and PRB 8,800 Btu/lb coal futures contracts, as well as the total open interest for the contracts, in the daily OTC Broker Index table in Platts Coal Trader.
The open interest data will be lagged one day because it is only available after Platts Coal Trader’s daily publishing deadline. See the original announcement.
ZEMA collects nearly 150 data reports on coal. For more information, visit http://www.ze.com/the-zema-solutions/.
The ZEMA graph below illustrates the change in the average weekly production of coal in the US from November 2009 until December 2014. Ranging from approximately 14.5 Mt to 20.0 Mt, production had the most volatility during the period 2010-2012 within the last five years. This data is retrieved from an EIA report.
Coal
December 2014
© Graph created with ZEMA
Coal
31
Platts to Publish US OTC Coal Front-Month, Quarter AveragesOn December 15, 2014, Platts announced that it will publish a daily average of the front-month and front-quarter prices for each of the five over-the-counter coal products it currently assesses in the OTC Broker Index table in Platts Coal Trader.
The front-month and front-quarter averages will show the direction of the underlying prices through the course of the referenced period, providing market participants with more visibility as to the direction of the final monthly settle for both prices.See the original announcement.
Platts Launches New Dry Bulk Panamax Assessment for Coal Trade RouteOn December 1, 2014, Platts launched a new dry bulk Panamax freight assessment for an established trade route of coal:
Size Cargo Type Origin Destination70,000 mt Coal Hampton Roads Isdemir, Turkey
This new assessment is based on modern Panamax dry bulk tonnage, and is published on a dollar per metric ton basis.See the original announcement.
ZEMA collects over 20 different coal record from Platts alone. To gain more informed insight regarding Platts’s new coal assessment, view ZEMA’s Platts records and coal records. To learn more, visit http://www.ze.com/the-zema-solutions/.
Argus Introduces New Metallurgical Coke Price Series to Argus Steel Feedstocks PublicationEffective December 4, 2014, Argus added two new price series to the Argus Steel Feedstocks publication and data module. The following PA codes can be found in the DSteelFeedstocks module in the DSteelFeedstocks folder on ftp.argusmedia.com:
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015305 8 8 0Metallurgical Coke 62% CSR fob north China
>Coal>A-sia-Pacific
Weekly
PA0015306 8 8 0Metallurgical Coke 65% CSR fob north China
>Coal>A-sia-Pacific
Weekly
See the original announcement.
On November 24, 2014, in the same publication, Argus introduced the following Coal Panamax size Australia series:
December 2014
Coal
32
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015189 0 20 0Coal panamax size Australia – China
>Freight>Coal>A-sia-Pacific
Daily
PA0015190 0 20 0Coal panamax size Australia – India
>Freight>Coal>A-sia-Pacific
Daily
As well, in the same publication, the following series has been renamed:
PA-code Old Description New Description
PA0004601 Coal panamax size Australia - JapanCoal panamax size east coast Australia - Japan
PA0004602 Coal panamax size Australia - South KoreaCoal panamax size east Australia - South Korea
PA0005195 Coal panamax size Indonesia - IndiaCoal panamax size Indonesia - east coast India
PA0010590 Coal panamax size Indonesia - China Coal panamax size Indonesia - south China See the original announcement.
Argus Adds New Coal Assessments to Argus Coal Daily InternationalEffective, November 24, 2014, Argus added the following series to Argus Coal Daily International. These changes apply to the dci files in the DCOAL folder on ftp.argusmedia.com.
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015282 0 8 0Coal landed cost EC Australia - S China 5500kcal
>Coal>Asia- Pacific
Daily
PA0015283 0 8 0Coal landed cost EC Australia - EC India 5500kcal
>Coal>Asia- Pacific
Daily
See the original announcement.
ZEMA collects more than a dozen data reports on coal from Argus alone. To learn more, visit http://www.ze.com/the-zema-solutions/.
Argus Introduces New Coal-Based Assessments to Argus FreightEffective November 24, 2014, Argus added two new series to the Argus Freight publication and data module. These changes apply to the dfr1 files in the DFR on ftp.argusmedia.com.
December 2014
Coal
33
The following series have been added:
PA-codeTime stamp
Price type
Continuous forward
Description Unit Category Frequency
PA0015189 0 20 0Coal panama size Australia – China
USD/t>Freight>-Coal>Asia- Pacific
Daily
PA0015190 0 20 0Coal panama size Australia – India
USD/t>Freight>-Coal>Asia- Pacific
Daily
See the original announcement.
Platts Proposes Discontinuing CAPP 1% vs. Compliance Coal SpreadOn December 8, 2014, Platts announced that it is proposing to discontinue listing the CAPP 1% vs. Compliance coal spread, currently listed in the daily OTC Broker Index table in PlattsCoal Trader.
Due to evolving market conditions, Platts believes there is no longer a premium for low sulfur Central Appalachia thermal coal, as the spread was envisioned to illustrate.
The affected code is CTMM001.See the original announcement.
Argus Revises Codes for Argus Coal Daily InternationalOn November 24, 2014, Argus made the following changes to the Argus Coal Daily International. These changes apply to the dci files in the DCOAL folder on ftp.argusmedia.com.
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0004665 0 8 0Coal delivered cost Australia - Japan
>Coal>Asia- Pacific
Daily
PA0004666 0 8 0Coal delivered cost Australia - S Korea
>Coal>Asia- Pacific
Daily
PA0004669 0 8 0Coal delivered cost Indonesia - Japan 6500kcal
>Coal>Asia- Pacific
Daily
PA0004671 0 8 0Coal delivered cost Indonesia - Japan 5800kcal
>Coal>Asia- Pacific
Daily
PA0004672 0 8 0Coal delivered cost Indonesia - S Korea 5800kcal
>Coal>Asia- Pacific
Daily
PA0004674 0 8 0Coal delivered cost Indonesia - S Korea 5000kcal
>Coal>Asia- Pacific
Daily
December 2014
Coal
34
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0005487 0 8 0Coal delivered cost Indonesia - India 4200kcal
>Coal> Asia-Pacific
Daily
PA0009548 0 8 0Coal delivered cost Indonesia - India 3400kcal
>Coal> Asia-Pacific
Daily
PA0010592 0 8 0Coal delivered cost Indonesia -China 5800kcal
>Coal> Asia-Pacific
Daily
PA0010594 0 8 0Coal delivered cost Indonesia -China 5000kcal
>Coal> Asia-Pacific
Daily
PA0010596 0 8 0Coal delivered cost Indonesia -China 4200kcal
>Coal> Asia-Pacific
Daily
PA0004607 0 8 0Coal Australia loading delays
>Coal> Asia-Pacific
Daily
PA0002599 0 20 0Coal panamax size Aus-tralia - Japan inc delays
>Coal> Asia-Pacific
Daily
PA0003074 0 20 0Coal panamax size Indonesia - Japan inc delays
>Coal> Asia-Pacific
Daily
PA0003075 0 20 0Coal panamax size Indonesia - South Korea inc delays
>Coal> Asia-Pacific
Daily
PA0004425 0 20 0Coal panamax size Australia - South Korea inc delays
>Coal> Asia-Pacific
Daily
PA0005196 0 20 0Coal panamax size Indonesia - India inc delays
>Coal> Asia-Pacific
Daily
PA0010591 0 20 0Coal panamax size Indonesia - China inc delays
>Coal> Asia-Pacific
Daily
PA0002599 0 20 0Coal panamax size Aus-tralia - Japan inc delays
>Coal> Asia-Pacific
Daily
See the original announcement.
December 2014
Coal
35
CME Group Expands Contract Month Listing for Indonesian Coal Futures ContractEffective December 21, 2014, CME Group expanded the listing schedule for the Indonesian Coal (McCloskey sub-bituminous) Futures contract (chapter 294, commodity code MCC) for trading on CME Globex and the New York Mercantile Exchange (NYMEX) trading floor, and for submission for clearing through CME ClearPort.
The new listing schedule for all trading and clearing venues is for the current year plus the next two calendar years as follows:
Contract Name Rule Chapter Clearing Code Current Listing Schedule New Listing ScheduleIndonesian Coal (McCloskey sub-bituminous) Futures
294 MCCMonthly contracts for the current year plus the next full calendar year
Monthly contracts for the current year plus the next two calendar years
See the original announcement.
December 2014
36
Softs and Metals
Platts Launches Supramax, Handysize Dry Bulk AssessmentsEffective December 1, 2014, Platts launched a number of new dry bulk Supramax and Handysize freight assessments, reflecting established trade routes of grain, scrap, and petcoke from the UK Continent, Baltic, US Gulf Coast, US East Coast, and Black Sea.
The launch of assessments for these routes follows feedback to a Platts proposal, published October 3, 2014. Platts will launch the following assessments for all routes proposed, except for a 25,000 mt steam coal route from Yuzhny, Ukraine, to Iskenderun, Turkey, which Platts will continue to review.
These new assessments reflect strong market interest in these routes and will be based on Supramax and Handysize dry bulk tonnage:
Size Cargo Type Origin Destination45kt Scrap Riga Aliaga, Turkey25kt Scrap Rotterdam Aliaga, Turkey45kt Scrap Rotterdam Aliaga, Turkey45kt Scrap New Jersey Aliaga, Turkey50kt Petcoke Houston Aliaga, Turkey50kt Grain New Orleans Kashima, Japan50kt Grain New Orleans Alexandria, Egypt25kt Grain Nikolaev Alexandria, Egypt
See the original announcement.
ZEMA collects multiple Platts records, including agricultural data. To gain more informed insight on this market, view ZEMA’s Platts records. To learn more, visit http://www.ze.com/the-zema-solutions/.
Platts Launches New Dry Bulk Panamax Assessment on Grain Trade RoutesEffective December 1, 2014, Platts launched a number of new dry bulk Panamax freight assessments reflecting established trade routes of grain from the US Gulf Coast and the Black Sea.
SOFTS
December 2014
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Softs and Metals
These new assessments reflect strong market interest in these routes and are based on modern Panamax dry bulk tonnage. Each assessment is published on a dollar per metric ton basis. The assessments are as follows:
Size Cargo Type Origin Destination60,000 mt Grain New Orleans Qingdao, China60,000 mt Grain New Orleans Fangcheng, South China*60,000 mt Grain New Orleans Alexandria, Egypt60,000 mt Grain Odessa Dammam, Saudi Arabia60,000 mt Grain Odessa Alexandria, Egypt
*This is a differential to the New Orleans-Qingdao value.See the original announcement.
Argus Introduces Month Averages to Fertilizer IndexOn November 28, 2014, Argus added new month averages to its fertilizer index. The following PA code details can be found in the DFertilizerIndex module in the /DFertilizerIndex folder on ftp.argusmedia.com.
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015311 0 17 0Urea prilled fob Yuzhny In-dex current month average
>Fertilizer>Urea Monthly
PA0015312 0 17 0Urea granular bulk fob Egypt Index current month average
>Fertilizer>Urea Monthly
PA0015313 0 17 0Urea granular bulk fob NOLA Index current month average
>Fertilizer>Urea Monthly
PA0015314 0 17 0Urea prilled bulk fob China Index current month average
>Fertilizer>Urea Monthly
PA0015315 0 17 0Urea granular bulk fob Middle East Index current month average
>Fertilizer>Urea Monthly
PA0015316 0 17 0Urea granular bulk cfr Brazil Index current month average
>Fertilizer>Urea Monthly
PA0015317 0 17 0DAP fob Tampa Index current month average
>Fertilizer>Urea Monthly
PA0015318 0 17 0DAP fob NOLA Index current month average
>Fertilizer>Urea Monthly
PA0015319 0 17 0UAN 32 fob NOLA Index current month average
>Fertilizer> Nitrogen
Monthly
December 2014
38December 2014
Softs and Metals
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0015320 0 17 0UAN 32 cfr US east coast Index current month average
>Fertilizer> Nitrogen
Monthly
See the original announcement.
ZEMA collects multiple data reports on fertilizer. To find out more, visit http://www.ze.com/the-zema-solutions/.
ICE to Issue New Sugar and Cotton Contracts for ICE Futures Singapore and ICE Clear SingaporeOn March 17, 2015, Intercontinental Exchange (ICE) will list two new futures contracts, which will be among the first to be listed for trading and clearing at ICE Futures Singapore and ICE Clear Singapore, subject to regulatory approval from the Monetary Authority of Singapore (MAS).
The products include the following regional futures contracts:
• Chinese Cotton No.1 futures
• Chinese White Sugar futures
Both contracts will be cash settled.
ICE selected these contracts following feedback from market participants, which emphasized the regional significance of hedging and trading each contract to local market participants. These new futures contracts will complement ICE’s existing portfolio of benchmark contracts, which includes ICE’s Sugar No.11, White Sugar, Cotton No.2, as well as the soon to be launched World Cotton contract.
ICE Trade Vault, LLC has submitted a foreign trade repository application to MAS, which will further support market participants’ compliance with regulatory reform in the region. See the original announcement.
EEX to Extend Portfolio by Introducing Agricultural ProductsEffective May 11, 2015, the European Energy Exchange (EEX), in cooperation with its clearing house European Commodity Clearing (ECC), will extend its product range to agricultural products, which are currently listed on Eurex Exchange.
The agricultural products listed on the Eurex Exchange will be delisted and simultaneously set up under the same conditions at EEX, subject to approval by the EEX Exchange Council. The migration of the existing Open Interest for agricultural products to the clearing house ECC is planned for May 8, 2015 after the end of trading. The launch of the new products at EEX is then planned for May 11, 2015.
With this step, EEX extends its product portfolio and provides clients with access to further commodity derivatives. Eurex Exchange members will need to become EEX members
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Softs and Metals
to access EEX agricultural products from May 2015 onwards. A new EEX membership category “Agricultural Products” will be introduced with the launch of the new product segment at EEX. This membership category will be offered without any annual fees.
Product details are as follows:
Group Contract Volume Min. Price Tick NotationButter Futures
5 metric tons Price Quotation is in points. The Mini-mum Price Change is 1 point, equivalent to a value of EUR 5.
In EUR per metric ton
Skimmed Milk PowderEuropean Whey Powder Futures
European Processing Potato Futures
250 quintals (25 tons) potatoes
The Price Quotation is in points with one decimal place. The Minimum Price Change is 0.1 points, equivalent to a value of EUR 25.
In EUR per 100 kg
Hog Futures8,000 kg slaughter weight
The Price Quotation is in points with three decimal places. The Minimum Price Change is 0.001 points, equivalent to a value of EUR 8.
In EUR per kg
Piglet Futures 100 piglets
The Price Quotation is in points with one decimal place. The Minimum Price Change is 0.1 points, equivalent to a value of EUR 10.
In EUR per piglet
Products are technically set up at Eurex T7. Dependent on individual requirements, customers can select the optimal solution from various front-end alternatives.
With the launch of agricultural products at EEX, the new EEX Direct Screen TT will be available at a special rate.See the original announcement.
ZEMA collects a wide range of European energy market data, including over 30 records from the EEX. These records include futures price and trading data. To learn more, visit http://www.ze.com/the-zema-solutions/.
Euronext to Launch Dairy ComplexIn spring 2015, Euronext will launch a dairy derivatives complex. The full suite of futures and options will cover the three key dairy products currently traded in Europe and internationally: butter, skimmed milk powder, and whey powder. This will allow the European dairy community to hedge its exposure to price fluctuations in this volatile market, just as the milk quotas expire in the European market. This launch is subject to relevant regulatory review.
On 31 March 2015, milk quotas, originally initiated under the EU’s Common Agricultural Policy, will expire leading to liberalization of production and potential increased volatility in the European dairy industry. In addition, global demand for milk is increasing while supply chains can be unpredictable. Within this context this new product complex will allow the industry to manage their risk more smoothly in a transparent, regulated and liquid market.See the original announcement.
December 2014
40December 2014
Softs and Metals
Platts to Delist Northwest European SME Biodiesel AssessmentsEffective May 30, 2015, Platts will discontinue its assessment for Northwest European SME biodiesel, holding no proof sustainability under the EU’s Renewable Energy Directive. This assessment corresponds with oracle code AAUCB00 and is published in the Platts database and on Biofuelscan. The weekly (AAUCB03) and monthly (AAUCB04) averages will also be discontinued. The assessment will be discontinued following a period of feedback beginning January 31, 2014.See the original announcement.
MGEX to Modify Apple Juice Concentrate Futures ContractEffective March 2015, MGEX, a designated contract market and derivatives clearing organization, is planning to modify its Apple Juice Concentrate (AJC) futures and options contract specifications, pending review from the Commodity Futures Trading Commission (CFTC).
The modification will increase the product’s malic acid range from 1.0 – 2.2% to 1.0 – 3.5%. This increased range is more representative of what is currently trading in the US cash market and also aligns with what is normally produced in Europe. Pending CFTC review, the change will be effective for the March 2015 futures contract month and all subsequent contract months. Consequently, any trade executed for the March 2015 contract and each subsequent contract month is subject to the proposed contract specification change. MGEX launched its AJC contract back in August 2012.See the original announcement.
Platts Launches Turkey ARC Steel Tracker DataOn December 1, 2014, Platts launched a new series of daily data analysis identifying price trends and price direction in the Turkish rebar, billet and scrap markets.
The Platts Turkey ARC Steel Tracker (Turkey ARC) has been designed to analyze price relationships of inputs and outputs to regional electric arc furnaces and rolling mills, and daily index and monetary values are proposed for each commodity and the market.
In total, there are two daily Turkey ARC indexes published apiece for rebar, billet and ferrous scrap (HMS 80:20), based on 30-day moving average and 60-day moving averages. There are also monthly averages for the data. In addition, corresponding monetary values for each index have been published, using Platts price assessments to base these on.
METALS
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Softs and Metals
A market direction metric, indicating daily overall price movement of the ARC commodities, and a composite index for the industry is also available. As well data will be published in Steel Markets Daily, Steel Price Report, and Steel Raw Materials Monthly.See the original announcement.
ZEMA collects numerous Platts records and over 70 records about metals. To learn more about the metals records ZEMA collects, visit http://www.ze.com/the-zema-solutions/data-coverage/.
Platts Launches New Dry Bulk Panamax Assessments on Iron Ore Trade RoutesEffective December 1, 2014, Platts launched a number of new dry bulk Panamax freight assessments reflecting established trade routes of iron ore.
The launch of assessments for these routes follows feedback to Platts’ proposal, published on October 3, 2014. Platts launched assessments for all routes proposed, except for a 70,000 mt, iron ore route from Sao Luis, Brazil to Rotterdam, Netherlands, which Platts will continue to review. The assessments are as follows:
Size Cargo Type Origin Destination70,000 mt Iron ore Port Cartier Rotterdam, Netherlands70,000 mt Iron ore Tubarao Rotterdam, Netherlands80,000 mt Iron ore Tubarao Qingdao, China
These new assessments reflect strong market interest in these routes and will be based on modern Panamax dry bulk tonnage. Each assessment is published on a dollar per metric ton basis. See the original announcement.
This ZEMA graph below illustrates Iron Ore Futures Settlement Pricing from December 2014 until December 2016, with a forecast date of December 22, 2014. Pricing ranges from just below $64 USD/t in November 2014 to $69 USD/t in December 2014. This data is collected from forward curve analyses from a CME data report.
December 2014
© Graph created with ZEMA
Softs and Metals
42December 2014
Platts Publishes New London Platinum/Palladium PricesOn December 1, 2014, Platts began publishing the twice-daily London Platinum Price and London Palladium Price provided by the London Metal Exchange. These have replaced the former London Platinum and London Palladium AM and PM fixes.
The London AM (symbol: AAIUE00) and PM (MMAHV10) Platinum Price and London AM (AAIUD00) and PM (MMABT10) Palladium Price can be found on the “Exchange-Traded Data and Third-Party Data” page of Platts Metals Daily and on pages 321, 434, and 437 of Platts Metals Alert.
The London Metal Exchange has been appointed by the London Platinum and Palladium Fixing Co. to be the new provider of London platinum and palladium prices.See the original announcement.
ICE to Introduce New Gold Contract for ICE Futures Singapore and ICE Clear SingaporeEffective March 17, 2015, ICE will list a new one-kilo gold futures contract, which will be among the first to be listed for trading and clearing at ICE Futures Singapore and ICE Clear Singapore, subject to regulatory approval from the Monetary Authority of Singapore (MAS). The contract will be physically settled with delivery in Singapore.
ICE Trade Vault, LLC has submitted a foreign trade repository application to MAS, which will further support market participants’ compliance with regulatory reform in the region. See the original announcement.
ZEMA collects 75 metal records, many of which contain data about gold specifically. To learn more about ZEMA’s data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.
ICE Launches CDS Index and European Interest Rate Swap FuturesEffective December 4, 2014, ICE has launched a multi-year license agreement for ICE exchanges to list futures and options based on the Eris Methodology, Eris’ patent-pending product design for constructing swap futures in a capital-efficient manner.
Under the agreement, ICE is licensing the rights to list European and US credit default swap futures and European interest rate futures based on the Eris Methodology.
The first product launch under the license agreement will be CDS futures based on the Markit CDX North American Investment Grade and High Yield indexes, listed on ICE Futures US and cleared at ICE Clear US, subject to regulatory approval. These CDS futures contracts, to be launched in the first half of 2015, will offer clients the regulatory certainty of futures without compromising traditional OTC characteristics, such as five-year tenor, spread and price-based quoting conventions, recognition of credit events, and the inclusion of Price Alignment Interest.
ICE Futures Europe will list interest rate swap futures denominated in EUR (Euro) and GBP (Pound Sterling), based on the product design of Eris’ US dollar-denominated Eris Standard
Softs and Metals
43December 2014
Swap Futures and Eris Flex Swap Futures. All ICE swap futures products based on the Eris Methodology will be available to clients via the ICE trading platform.See the original announcement.
LME Launches LBMA Platinum and Palladium PricesEffective December 4, 2014, the London Metal Exchange (LME) has successfully launched LMEbullion, a custom-built electronic solution to provide reference prices for the platinum and palladium markets.
LMEbullion provides a fully automated price-discovery process, holding two daily auctions at 9:45 a.m. and 2 p.m. Authorized traders participate through a secure web interface, where they can view the auction price and each submit their interest until a final price is set. LMEbullion also has a public web presence, providing near real-time auction commentary and anonymized buy/sell figures.See the original announcement.
ZEMA collects reports from the agricultural market on a daily basis; ZEMA also collects over 80 reports on metals markets. To learn more about ZEMA’s extensive data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.
Platts Discontinues China Domestic Pig Iron PriceEffective December 1, 2014, Platts has discontinued its monthly China domestic pig iron price assessment (SB01173). The Hebei-based assessment in yuan has been discontinued due to a lack of trading in the spot market.See the original announcement.
Platts Delists China Domestic Stainless CR 201 PriceOn December 1, 2014, Platts discontinued SBB price series: SB01053 Stainless Steel/CR 201 2B 1-2mm/China domestic Foshan (incl. 17% vat) RMB/mt monthly, due to a lack of trading in the spot market and limited interest in the price series as a market reference.See the original announcement.
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Finance
December 2014
CME and CBOT Begin Treasury Futures Contracts and Invoice SpreadsOn December 15, 2014, the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT) began trading intercommodity treasury invoice spreads. These spreads consist of forward-starting Libor-reference interest rate swaps. Details are detailed below.
Intercommodity Treasury Invoice Spread
Minimum Block Trade Threshold – Invoice Swap Notional Principal Amount ($ mlns)
Minimum Block Trade Threshold – Treasury Futures Contracts
CBOT 2-Year Invoice Spread 460 2,300
CBOT 5-Year Invoice Spread 240 2,400
CBOT 10-Year Invoice Spread 170 1,700
CBOT Treasury Bond Invoice Spread 120 1,200
CBOT Ultra Bond Invoice Spread 120 1,200
CBOT is also notifying the marketplace that it is impermissible to execute contingent block trades in Treasury Invoice Spreads where the minimum thresholds for block trades in outright CBOT Treasury Futures are circumvented.See the original announcement.
ZEMA collects many reports from the Chicago Mercantile Exchange regarding Chicago Board of Trade financial information, including the CBOT Futures daily price report. To learn more about how to transform this collected data into useful market intelligence, visit http://www.ze.com/the-zema-suite/market-analyzer/.
CBOT Launches Treasury Invoice SwapsEffective December 13, 2014, CBOT launched the following new interest rate swap (IRS) products:
• Two-Year Treasury Invoice Swaps (Clearing Codes T1A, T2A, T3A) • Five-Year Treasury Invoice Swaps (Clearing Codes F1A, F2A, F3A)• Ten-Year Treasury Invoice Swaps (Clearing Codes N1A, N2A, N3A)• Treasury Bond Invoice Swaps (Clearing Codes B1A, B2A, B3A)• Long-Term Treasury Bond Invoice Swaps (Clearing Codes U1A, U2A, U3A)
CBOT Treasury invoice swaps are listed for trading on the CME Globex electronic trading platform (CME Globex) solely in the form of intermarket spreads known as invoice spreads. An
45
Financeinvoice spread transaction characteristically entails the simultaneous execution of a Treasury invoice swap and the corresponding relevant CBOT Treasury futures contract. Such invoice spreads are listed for trading on CME Globex (Sun-Fri, 5 p.m. to 4 p.m., Chicago time) and are identified by the Clearing Codes cited above. Additionally, market participants may notify the Exchange of block transactions in such invoice spreads via CME ClearPort (Sun-Fri, 5 p.m. to 4:15 p.m., Chicago time).See the original announcement.
ICE to List New Chinese Renminbi Futures Contract for ICE Futures Singapore and ICE Clear SingaporeEffective March 17, 2015, Intercontinental Exchange (ICE) will issue a new Chinese Renminbi futures contract, which will be among the first to be listed for trading and clearing at ICE Futures Singapore and ICE Clear Singapore, subject to regulatory approval from the Monetary Authority of Singapore (MAS). The contract will be cash settled.
ICE Trade Vault, LLC has submitted a foreign trade repository application to MAS, which will further support market participants’ compliance with regulatory reform in the region. See the original announcement.
ZEMA collects over 130 ICE records, including several financial records. To learn more about how ZEMA can collect, aggregate, and analyze data, book a complimentary ZEMA demonstration now at http://www.ze.com/book-a-demo/.
ICE and Eris Exchange Launches CDS Index and European Interest Rate Swap FuturesEffective December 4, 2014, ICE and Eris Exchange, a US-based futures exchange group, today announced a multi-year license agreement for ICE exchanges to list futures and options based on the Eris Methodology, Eris’ patent-pending product design for constructing swap futures in a capital-efficient manner.
Under the agreement, ICE is licensing the rights to list European and US credit default swap futures and European interest rate futures based on the Eris Methodology.
The first product launch under the license agreement will be CDS futures based on the Markit CDX North American Investment Grade and High Yield indexes, listed on ICE Futures US and cleared at ICE Clear US. These CDS futures contracts, to be launched in the first half of next year, will offer clients the regulatory certainty of futures without compromising traditional OTC characteristics, such as five-year tenor, spread and price-based quoting conventions, recognition of credit events and the inclusion of Price Alignment Interest.See the original announcement.
December 2014
46
Thomson Reuters Launches Malaysian Ringgit and Philippines Peso TradingOn December 15, 2014, Thomson Reuters launched the real-time electronic trading of spot and forward Malaysian Ringgit and Philippines Peso on Thomson Reuters Matching platform.
The addition of the new currencies to Thomson Reuters Matching means onshore banks now have access to an electronic central limit order book, providing them with more reference on pricing levels of the USD/MYR and USD/PHP pairs.
In the Philippines, Thomson Reuters has partnered with the Philippine Dealing System Holdings Corp. & Subsidiaries (PDS Group) to provide the foreign exchange electronic trading platforms to members of the Bankers Association of the Philippines, the association that operates the Philippines’ USD/PHP spot and swap markets.
Meanwhile in Malaysia, Bank Negara Malaysia has granted an approval to conduct electronic money-broking services, making Matching the first electronic matching system for USD/MYR.See the original announcement.
ZEMA collects almost 100 records from Thomson Reuters on a daily basis. To learn more, visit http://www.ze.com/the-zema-solutions/data-coverage/.
Thomson Reuters Releases StarMine SmartEconomics Forecast ModelOn December 8, 2014, Thomson Reuters released StarMine SmartEconomics, a model that generates more accurate forecasts of macroeconomic data and FX rates. This is the first time that Thomson Reuters StarMine has applied its SmartEstimates methodology to economic data and FX rates to help professional investment managers generate investment ideas and mitigate risks.
StarMine creates SmartEstimates for approximately 30 FX rates and 700 global economic indicators spanning 50 countries, covering all the major market indicators such as non-farm payrolls, GDP, inflation, retail sales, and many more. For economic indicators, the SmartEstimate is released each time a new poll is conducted, which is typically several days to a week before an expected economic release. SmartEstimates for FX rates are generated at the start of each month, forecasting the FX rate one, three, six, and twelve months out.
StarMine SmartEconomics is StarMine’s first model targeting macroeconomics and FX rates, with more macroeconomic models to come. It is provided as a daily data feed from Thomson Reuters, as well as through Thomson Reuters Eikon, the premiere desktop platform for financial professionals.See the original announcement.
Finance
December 2014
47
Deutsche Börse Launches New ETF in XTF Segment on XetraEffective December 12, 2014, Deutsche Börse launched a new equity index ETF issued by Source that is now tradable in the XTF segment on Xetra. The details are as follows:
• ETF name: Source S&P 500 UCITS ETF – EUR Hedged• Asset class: equities• ISIN: IE00BRKWGL70• Total expense ratio: 0.15%• Distribution policy: non-distributing• Benchmark: S&P 500 EUR Hedged Net Total Return IndexSee the original announcement here.
ZEMA presently collects data from Deutsche Börse about derivatives products. To learn more about how ZEMA can leverage Deutsche Börse market data, visit http://www.ze.com/the-zema-suite/.
Deutsche Börse Launches New SPDR Bond Index on XetraOn December 4, 2014, Deutsche Börse launched a new SPDR ETF that enables investors to participate in the performance of euro-denominated government bonds from the euro zone. The index contains government bonds with an investment grade rating and a residual maturity of between three and five years.
The details of the new index are as follows:
• ETF name: SPDR Barclays 3-5 Year Euro Government Bond UCITS ETF• Asset class: bond index ETF• ISIN: IE00BS7K8821• Ongoing charges: 0.15%• Distribution policy: distributing• Benchmark: Barclays 3-5 Year Euro Treasury Bond IndexSee the original announcement.
Deutsche Börse Launches New UBS Index ETF on XetraOn December 4, 2014, Deutsche Börse introduced a new bond index fund issued by UBS Global Asset Management on liquid US corporate bonds, tradable in the XTF segment on Xetra.
The new UBS ETF enables investors to participate in the performance of liquid USD-denominated bonds issued by companies domiciled in the USA. The corporate bonds in the index have an investment grade rating and a residual maturity of between one and five years.
Finance
December 2014
48
Details of this new index are as follows:
• ETF name: UBS ETF - Barclays US Liquid Corporates 1-5 Year UCITS ETF• Asset class: bond index ETF• ISIN: LU1048314949• Ongoing charges: 0.18%• Distribution policy: distributing• Benchmark: Barclays US Liquid Corporates 1-5 Year Total Return IndexSee the original announcement.
ZEMA regularly collects more than 300 finance-related data reports. To learn more, visit http://www.ze.com/the-zema-suite/.
Deutsche Börse Launches PowerShares Equity Index on XetraOn December 1, 2014, Deutsche Börse launched an equity index fund from the ETF offering issued by PowerShares Global Funds. The information for the fund is listed below:
• ETF name: PowerShares Global Buyback Achievers UCITS ETF• Asset class: equity index ETF• ISIN: IE00BLSNMW37• Total expense ratio: 0.39%• Distribution policy: distributing• Benchmark: NASDAQ Global Buyback Achievers NTR Index
The PowerShares Global Buyback Achievers UCITS ETF tracks for the first time the performance of the NASDAQ Global Buyback Achievers NTR Index. The reference index comprises companies with a global focus which are listed in the NASDAQ International or NASDAQ US Buyback Achievers Index. Companies must have bought back at least 5% of their outstanding stock over the past twelve months to be considered.See the original announcement.
DCCC Introduces New Indian Rupee ContractsEffective December 19, 2014, the Dubai Commodities Clearing Corporation (DCCC) have included the following products in the list of Inter-Commodity Spread Credit:
• Indian Rupee Futures Contract• Indian Rupee Mini Futures ContractSee the original announcement.
Develop your own finance market data warehouse using ZEMA’s best-in-class data collection and validation functionalities. To learn more, book a complimentary ZEMA demonstration.
Finance
December 2014
49
FinanceTriOptima Launches First Cross Currency Swap Compression in USD/Turkish LiraEffective December 17, 2014, TriOptima completed the elimination of $213 billion in the first USD/TRY (Turkish Lira) cross currency swap triReduce compression cycle.
Cross currency swaps are subject to both interest rate and foreign exchange rate fluctuations and are not currently cleared. They increase an institution’s credit and capital costs as well as its settlement risk.
Since cross currency compression began in April 2014, TriOptima has run eight successful triReduce cross currency swap compression cycles in USD/CAD, USD/EUR, USD/GBP, USD/JPY, USD/MXN, and USD/ZAR.
Additional cross currency compression cycles planned include: Chinese Yuan, Korean Won, and the Russian Ruble. triReduce [sic] compression cycles can accommodate all transaction types whether are float/float or fixed/float, resetting and non-resetting.See the original announcement here.
TriOptima Launches First Compression Cycle for Cleared JPY Interest Rate SwapsEffective December 16, 2014, TriOptima completed the first compression cycle for cleared JPY interest rate swaps in the Japanese Securities Clearing Corporation (JSCC). Fourteen major Japanese and international financial institutions eliminated JPY 9.6 trillion ($82.24 Billion USD) in notional principal in JSCC’s first triReduce multilateral risk-constrained compression cycle.
Eliminating notional principal reduces operational risk and contributes to complying with Basel III leverage ratio requirements and overall stability in the global financial system.See the original announcement here.
ZEMA, ZE’s data management solution, excels at displaying time-series data in charts, graphs, forward curves, and more. ZEMA also collects financial derivatives data from a wide range of sources. For further information, visit http://www.ze.com/the-zema-suite/.
DSE Launches Trading Engine Powered by NasdaqOn December 12, 2014, Dhaka Stock Exchange (DSE) and Nasdaq announced that DSE has gone live with its new trading engine powered by Nasdaq’s X-stream INET technology. This refresh is expected to boost the exchange’s technological capability and capacity and enhance market resiliency. The new system has multi-asset class capabilities on a multi-platform offering. See the original announcement.
December 2014
50
Finance
Nasdaq Lists Validea Market Legends ETFOn December 10, 2014, trading began on the Validea Market Legends ETF (symbol: VALX), listed by Validea Capital Management, on the Nasdaq Stock Market.
According to Validea Capital, VALX is an actively managed fund that focuses on finding the most fundamentally sound stocks using disciplined investing models based on the strategies of Wall Street legends. The portfolio is comprised of 10 unique investment models, each of which is based on the strategy of an investment legend. The strategies’ investment styles range from value to growth to income- and momentum-based approaches.
The combination of different types of investing strategies allows the fund to seek market outperformance, while still setting itself up to perform well in different types of market environments when different investing strategies are in favor.
The fund focuses exclusively on the fundamentals when selecting stocks and by employing a disciplined rebalancing approach to ensure that the highest scoring stocks according to the stock selection system remain in the portfolio over time.See the original announcement.
ZEMA collects over 50 NASDAQ OMX records, including financial market records. For further information, visit http://www.ze.com/the-zema-solutions/.
December 2014
51
FinanceEuronext Launches the “Euronext Expert Market” On December 9, 2014, Euronext launched the Euronext Expert Market, an electronically traded secondary market offering a transparent and secure platform for the sale of non-listed securities by weekly auction.
Based in Belgium, the Euronext Expert Market is classed as a Multilateral Trading Facility and is the first market of its kind to be set up by a European exchange. The Euronext Expert Market replaces the former floor-traded Belgian Public Auctions Market (Marché des Ventes Publiques / Markt van de Openbare Veilingen), migrating from the current open outcry format to electronic trading.
The launch of the Euronext Expert Market has been designed to coincide with the last phase of the dematerialization process in Belgium, which will oblige the issuers of physical securities to sell any non-reconciled positions they may have in these securities.See the original announcement.
The ZEMA graph below shows the Bank of Canada’s daily conversion rates of EUR to USD from December 23, 2009 to December 23, 2014. Ranging from a high of $1.5 USD per EUR to a low of $1.19 USD per EUR, volatility was greatest between November 2009 and June 2010. Data was collected from a Foreign Exchange report.
December 2014
© Graph created with ZEMA
Finance
52December 2014
PIMCO Launches New Active ETF on XetraOn November 28, 2014, PIMCO Fixed Income Source launched a new active ETF on Xetra. The details of the ETF are as follows:
• Name: PIMCO Low Duration Euro Corporate Bond Source UCITS ETF • ISIN: IE00BP9F2J32• Total expense ratio: 0.39%• Distribution policy: distributing
This ETF enables investors to participate in the performance of corporate bonds issued in euro via an actively managed ETF. At least 90% of the investment portfolio underlying the active ETF consists of investment grade corporate bonds issued in euro. Up to 20% of the fund assets can be invested in the emerging markets region. The currency risk may amount to up to 10% due to corporate bonds not denominated in euro. The average duration ranges from zero to four years.See the original announcement.
ZEMA collects over 300 financial market records. To learn more about ZEMA’s vast data coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.
GFI Launches USD MAC Swaps on RatesMatchEffective November 25, 2014, GFI Group Inc. launched USD Market Agreed Coupon MAC Swaps on its SEF. Live tradable prices for these contracts are available in a Central Limit Order Book (CLOB) on GFI’s electronic trading platform for interest rates, RatesMatch SM. Clearing of these swaps is done via Straight Through Processing STP with CME Group and LCH.Clearnet.
MAC swaps were created by SIFMA & ISDA as an over-the-counter swap product with pre-defined standard terms. They start on IMM (International Monetary Market) dates and trade with a pre-set fixed rate determined by SIFMA & ISDA. The standardization of product terms allows for greater initial margin and line item efficiencies for market participants.See the original announcement.
HKEx Discontinues Trading of Three-Year Exchange Fund Note FuturesEffective January 1, 2015, the Hong Kong Exchanges and Clearing Limited (HKEx) discontinued trading in its Three-Year Exchange Fund Note (EFN) Futures because the Hong Kong Monetary Authority has stopped issuing Three-Year EFNs.
HKEx will not introduce any new Three-Year EFN contract months, and trading of contract months without open interest was discontinued with immediate effect as of October 12, 2014.
Finance
53December 2014
Existing contract months with open interest will be available for trading until expiration or all the respective open positions are closed out, whichever is earlier.See the original announcement.
CBOE Enters into Agreement with MSCI Inc. to List Index OptionsOn December 10, 2014, CBOE Holdings Inc. announced that it has entered into a licensing agreement with MSCI Inc. to offer options trading on several MSCI indexes. Under the agreement, in the United States, options on the MSCI indexes will be solely listed for trading on the Chicago Board Options Exchange (CBOE).
The six indexes included in the agreement are the MSCI EAFE Index, MSCI Emerging Markets Index, MSCI ACWI Index, MSCI USA Index, MSCI World Index and the MSCI ACWI ex-USA Index.
CBOE plans to offer options trading in the first quarter of 2015, pending regulatory approval, on two of MSCI’s best-known indexes: the MSCI EAFE Index and the MSCI Emerging Markets Index. CBOE plans to list options on the four other MSCI Indexes later in 2015. Options on MSCI Emerging Markets and EAFE indexes could become valuable tools for investors looking to efficiently hedge their non-US equity portfolio exposures or to diversify their portfolios. Trading in options on other MSCI indexes offer new opportunities to hedge a variety of differ-ent exposures, as well.
In total, MSCI’s Indexes are estimated to have over $9.5 trillion benchmarked to them on a worldwide basis.
• The MSCI EAFE Index is recognized as the pre-eminent benchmark in the United States to measure international equity performance. It comprises the MSCI country indexes that represent developed markets outside of North America: Europe, Australasia and the Far East. The MSCI EAFE Index is calculated in US dollars on a real-time basis, and values are disseminated every 60 seconds during market trading hours.
• The MSCI Emerging Markets Index captures large- and mid-cap representation across 23 emerging markets countries. With over 800 constituents, the index covers approximately 85% of the free-float-adjusted market capitalization in each country.
• The MSCI ACWI Index (All Country World Index) is a free-float-adjusted, market- capitalization-weighted index designed to measure equity-market performance throughout the world. The MSCI ACWI is comprised of stocks from both developed and emerging markets. The index consists of 46 country indexes comprising 23 developed and 23 emerging market country indexes.
• The MSCI USA Index is a free-float-adjusted market-capitalization index that is designed to measure large- and mid-cap US equity market performance. The MSCI USA Index is a member of the MSCI Global Equity Indexes and represents the US equity portion of the global benchmark MSCI ACWI Index.
Finance
54December 2014
• The MSCI World Index captures large- and mid-cap representation across 23 developed markets and 23 emerging market country indexes. With more than 1,500 constituents, the index covers approximately 85% of the free-float-adjusted market capitalization in each country.
• The MSCI ACWI ex-USA Index captures large-, mid- and small-cap representation across 22 of 23 developed markets countries (excluding the United States) and 23 emerging markets countries. The index covers approximately 99% of the global equity opportunity set outside the United States.
See the original announcement.
ICE Sells Remaining Shares in EuronextOn December 8, 2014, ICE announced its intention to sell approximately 4.2 million shares in Euronext NV, representing approximately 6% of Euronext’s share capital, by way of an accelerated book-building to institutional investors.
Following the sale, assuming all shares are sold, ICE will no longer hold any of Euronext’s share capital and voting rights. This transaction marks the final exit from Euronext by ICE, in line with its previously announced strategy. ICE received a waiver of the lock-up agreement entered into at the time of the Euronext initial public offering in June 2014, which was due to expire on December 21, 2014. The shares are offered by way of a private placement to institutional investors. See the original announcement.
ICE Completes Acquisition of Majority Stake in Holland Clearing HouseEffective December 3, 2014, ICE has completed its previously announced strategic investment in the Holland Clearing House (HCH), a continental European derivatives clearing house, to support its comprehensive clearing strategy. HCH is based in Amsterdam and is the primary clearing house for the TOM multi-lateral trading facility. HCH is regulated and supervised in the Netherlands by the Authority by the Authority Financial Markets (AFM) and the Dutch Central Bank (DNB). Terms were not disclosed.See the original announcement.
ICE Completes Liffe Transition to ICE Futures EuropeEffective November 24, 2014, ICE has completed the Liffe futures and options transition to ICE Futures Europe. The final phase of the Liffe transition was completed with the equity derivatives complex transferring to the ICE platform, following the previous migrations of European interest rate derivatives and soft commodity contracts.
The Liffe equity derivative contracts that were migrated to the ICE platform include futures and options on the FTSE 100 Index, futures contracts on the MSCI World and MSCI Europe Indexes, as well as a comprehensive range of Single Stock Futures, Dividend Adjusted Stock Futures, and Individual Equity Options.
Finance
55December 2014
With European equity derivatives, interest rate derivatives, and soft commodities now listed on the ICE trading platform, these contracts can now be traded side by side on WebICE with ICE’s flagship US MSCI and Russell index contracts, Eurodollar futures contracts, and GCF Repo futures contracts.
• The transition of Liffe contracts to the ICE platform provides:• Retention of pro-rata, allocation-based matching model for interest rate futures markets• Enhanced wash-trade prevention protections, including ICE’s self-trade
prevention functionality
Improved pre-trade risk management technology and interval price limit circuit breakersSee the original announcement.
Bloomberg’s FX Technology Platform Selected by Malaysia Money Brokers AssociationOn December 2, 2014, Bloomberg announced that the Malaysia Money Brokers Association, which comprises six licensed money brokers in Malaysia, has chosen Bloomberg as its primary platform for the dissemination of foreign exchange (FX) rates. Under this arrangement, live Malaysian ringgit (MYR) FX spot and forward prices quoted by the brokers has been made available on the Bloomberg Professional Service.
Traders, analysts, and institutional investors now have more comprehensive and informed ability to make timely trading and investment decisions, with insight into the Malaysian ringgit traded onshore.
The money broker community in Malaysia includes Affin Moneybrokers Sdn Bhd, Amanah Butler Malaysia Sdn Bhd, First TAZ Tradition Sdn Bhd, Forex Enterprise Sdn Bhd, Harlow’s & MGI Sdn Bhd, and KAF-Astley & Pearce Sdn Bhd.See the original announcement.
Eurex and GMEX Sign Swap Futures Trading and Clearing AgreementEffective December 11, 2014, Eurex Group announced the signing of a license agreement with Global Markets Exchange Group Limited (GMEX). Eurex will license GMEX’s Euro- denominated Constant Maturity Future (CMF) for trading via Eurex’s Multilateral Trade Registration (MTR) service and clearing on Eurex Clearing.
The CMF is based on the Interest Rate Swap Index Average (IRSIA) and accurately tracks the interest rate exposure at each point on the yield curve by removing the expiry date and marking the contract to market against an IRSIA Constant Maturity Index on a daily basis. The contract facilitates the management of interest rate exposure without a constant need to re-adjust and maintains the liquidity of a given maturity from 2 to 30 years.
Finance
56December 2014
Under the terms of the arrangement, transactions in CMF contracts will be arranged on GMEX’s trading platform and executed at Eurex Exchange with clearing taking place at Eurex Clearing. This licensing model will also enable Eurex Exchange members to trade GMEX’s Euro-denominated CMF under their current membership and benefit from existing clearing agreements and infrastructure.See the original announcement.
China Financial Futures Exchange Signs MOU with Dubai Gold and Commodities ExchangeEffective December 8, 2014, the China Financial Futures Exchange (CFFEX) and Dubai Gold and Commodities Exchange (DGCX) announced the signing of a Memorandum of Understanding (MOU) with each other. This is the first MOU that CFFEX has signed with a derivatives exchange in the Middle East.
This partnership is intended to strengthen cooperation between the derivatives markets of China and the Middle East and facilitate cooperation in areas concerning risk management, business strategy, market surveillance, and new product development.
At present, investment and trade flows between China and the United Arab Emirates (UAE) are constantly growing. According to a recent report, China is expected to be one of the UAE’s fastest growing trade partners over the next twenty years as bilateral trading volume has been growing at 10% per annum. Against this backdrop, financial cooperation between the two nations is also being strengthened, and the signing of this MOU between CFFEX and DGCX helps pave the road for further financial cooperation.See the original announcement here.
Korea Exchange and DME Announce CooperationEffective November 24, 2014, Korea Exchange (KRX) and the Dubai Mercantile Exchange (DME) signed a Memorandum of Understanding (MOU) to strengthen their cooperation in promoting the development of commodity futures contracts and in particular crude oil.
KRX and DME will work together to develop crude oil futures trading in the Republic of Korea, with a particular focus on developing an energy trading ecosystem around the National Oil Hub Project in Ulsan, Korea. Ulsan aims to become the energy hub for Northeast Asia by developing large scale oil storage and port facilities to complement its existing petrochemical infrastructure and ports.
KRX and DME will also explore other areas of cooperation, including joint marketing arrangements, cross-listing agreements, staff exchange, and joint research.See the original announcement.
Weather and Em
issions
57December 2014
Argus Removes Emission Assessments from Argus Air DailyOn December 2, 2014, Argus issued changes to Argus Air Daily. These changes apply to the data files in the duseum data files in the \DADR folder on ftp.argusmedia.com.
The following codes have been stopped:
PA-codeTime stamp
Price type
Continuous forward
Description Category Frequency
PA0002616 211, 2, 8
0NOx US seasonal monthly index
>Emissions>NOx Monthly
PA0002649 211, 2, 8
1NOx US seasonal assessments for year
>Emissions>NOx Daily
See the original announcement.
58
New ZEMA Data Reports – December 2014For 20 years, ZE PowerGroup Inc. (ZE) has consistently kept up to date on the latest in energy and commodity data changes. ZE collects data from vendors spanning the weather, oil, natural gas, electricity, agriculture, and finance industries, including Platts, Argus, the Chicago Mercantile Exchange, the New York Mercantile Exchange, the Intercontinental Exchange, and OPEC. ZE then provides its clients with access to both public (free subscription) and private data reports, including reports that are collected based on clients’ specific needs.
Since the last issue of ZE DataWatch, ZE has added numerous data reports published by EIA, Gestore dei Mercati Energetici (GME), BMRS, NOAA, and SPP. The 10 new EIA reports cover a range of crude oil reports including production, imports, and price movements. This set of new parsers has been developed in response to a growing need for petroleum supply information. The 12 new GME reports were gathered in response to investors’ and traders’ need for more assessment data concerning electricity—from ancillary services to intraday electricity prices.
For further information on these reports, visit:
• http://www.eia.gov/petroleum/supply/monthly/
• https://www.mercatoelettrico.org/En/Default.aspx
• http://www.bmreports.com/
• http://www.noaa.gov/
• http://www.spp.org/
To see the full list of ZEMA data providers, visit http://www.ze.com/the-zema-solutions/ data-coverage/.
News from Data Vendors
December 2014
59
News from Data Vendors
Exchange Council Calls for European-wide Implementation of Reverse Charge MechanismVienna / Paris, December 8, 2014. The Exchange Council of EPEX SPOT, at its latest meeting in Vienna, called for the European-wide implementation of the Reverse Charge Mechanism (RCM) in order to battle effectively VAT fraud on European energy markets. The Council also acknowledged the work of the European Power Exchange on improving the Intraday trading availability.
The fight against VAT fraud is one of the most crucial, yet challenging tasks of any Exchange and its members. Since its creation, EPEX SPOT has been at the forefront of the European-wide campaign against tax fraudsters and money laundering.
In 2013, the European Union adopted an ambitious anti-VAT fraud package, including the possibility for Member States to implement a Reverse Charge Mechanism to qualifying electricity and gas transactions. It moves the obligation for collecting VAT from the seller to the buyer of the goods; this prevents VAT fraud and forestalls significant losses to their Exchequers as well as to affected organizations.
A group of ten European gas and electricity associations stated recently that only six EU Member States have transposed this set of legal measures into national law: Austria, France, Germany, the Netherlands, Romania, and the United Kingdom. Hence, 22 EU Member States remain unprotected.
The Exchange Council called upon the Member States to implement quickly the RCM across Europe, as VAT fraud poses a significant high-level risk to market participants. “This has the potential to severely damage energy markets integrity”, says Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT. “Let’s be coherent with the principles that led to implement REMIT throughout Europe!”
The role of Intraday trading and its quality gains in importance. Exchange members and the Exchange Council follow closely the development and improvement of Intraday trading. Today, the Intraday trading system ComXerv provides an availability of over 99.5% on yearly average. The teams of EPEX SPOT work hard on further improving this performance, as the quality of a 24/7 trading solution with direct impact on the efficiency of the overall power system is determined by its availability. EPEX SPOT is tackling several topics, thereof: the improvement of the Intraday trading chain via a central Data Transfer Tool, to be deployed in Q1 2015; the roll-out of a new improved ComTrader client which is currently ongoing; a reinforcement of the frequency the trade and flow data is exchanged amongst the links of the Intraday trading chain.
December 2014
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News from Data Vendors
December 2014
The European Power Exchange is dedicated to further safeguard Intraday trading. The members of the Exchange Council acknowledged the efforts of EPEX SPOT. “Trading participants are eager to see these improvements”, says Peter Heydecker, Chairman of the Exchange Council. “We need to set a strong foundation for the future of power trading, and Intraday is clearly one important cornerstone.”
The fourth meeting of the Exchange Council in 2014 was held in Vienna on December 4, 2014, and was chaired by Peter Heydecker.
The Exchange Council of EPEX SPOT is an official body of the Exchange. 16 members and 7 permanent guests represent adequately the diversity of economic and corporate profiles that exists among the Exchange Members from various sectors: producers, power trading companies, transmission system operators, regional suppliers and financial service providers, as well as commercial consumers and academics. Its missions include in particular the adoption of the Exchange Rules and the Code of Conduct of EPEX SPOT and their amendments. The Exchange Council approves new trading systems as well as new contracts or market areas and approves the appointment of the Head of the Market Surveillance Office. It meets up quarterly.
The European Power Exchange EPEX SPOT SE operates the power spot markets for Germany, France, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European power consumption. EPEX SPOT also acts as market operating service provider for the Hungarian Power Exchange HUPX and operates the coupling between the Czech, the Slovak, the Hungarian and the Romanian markets on behalf of the local Exchanges. It is a European company (Societas Europaea) based in Paris with branches in Leipzig, Bern and Vienna. Over 220 companies from Europe are active on EPEX SPOT. 344 TWh were traded on EPEX SPOT’s power markets in the first eleven months of 2014.
News from Data Vendors
61December 2014
Successful Launch of 15-Minute Intraday Call Auction in GermanyParis / Leipzig, December 9, 2014 – EPEX SPOT has successfully launched the Intraday call auction for 15-minute contracts on the German power market. 58 trading participants joined the first auction session today at 3 p.m. 17,690 MW were traded. The base price – the average price of all contracts traded for delivery 10 December – came out at 32.53 Euro/MWh. More detailed market data on the first trading day can be found on the website of the European Power Exchange (www.epexspot.com). Another five to ten trading participants are expected to join the 15-minute call auction until the end of the year. Please find below the price curve and the traded volumes per 15-minute period for the first delivery day.
The new 15-minute call auction on the German Intraday market is designed to cope better with the emerging flexibility challenges of power markets. It takes place daily at 3 p.m., year-round, before the opening of the continuous Intraday market for 15-minute contracts at 4 p.m., and covers the 96 15-minute contracts for the next calendar day from midnight on. The auction runs on the EPEX Trading System (ETS) used for EPEX SPOT’s Day-Ahead markets. The calculation of prices and volumes is performed using Euphemia, a tool co-developed by EPEX SPOT in the framework of the Price Coupling of Regions initiative.
15-minute contracts help fine-tuning portfolios after the Day-Ahead auction for hourly contracts at noon and facilitate trading for intra-hour variations in production and consumption. The 15-minute auction is incorporated in the Intraday market segment, as it is held after the day-ahead nomination deadline at 2:30 p.m. in Germany. It will prove to be a valuable tool for market participants as it will help them fulfilling their balance requirements towards German transmission system operators already on the calendar day before delivery.
The already existing 15-minute prices that emerge on the continuous Intraday market remunerate more accurately flexible capacity able to respond to 15-minute variations in production and consumption. The auction further fosters this idea by concentrating liquidity and creating the most robust possible price reference. More specifications can be found in the factsheet on the 15-minute Intraday call auction.
The European Power Exchange EPEX SPOT SE operates the power spot markets for Germany, France, Austria, and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European power consumption. EPEX SPOT also acts as market operating service provider for the Hungarian Power Exchange HUPX and operates the coupling between the Czech, the Slovak, the Hungarian, and the Romanian markets on behalf of the local Exchanges. It is a European company (Societas Europaea) based in Paris with branches in Leipzig, Bern, and Vienna. Over 220 companies from Europe are active on EPEX SPOT. 344 TWh were traded on EPEX SPOT’s power markets in the first eleven months of 2014.
News from Data Vendors
62December 2014
Speedwell SuperPack Offers Historical Weather Data and Weather Data FeedsSuperPack, the pre-eminent weather data package for users of large volumes of weather data, continues to grow: SuperPack subscribers now have immediate access to over 15,000 weather stations world-wide and on-request access to our secondary archive of over 100,000 weather stations.
Speedwell SuperPack makes available an unprecedented range of quality historical weather data and weather data feeds for a single annual fee dramatically simplifying the administration of group-wide weather data needs. A single contract covers all users across multiple office locations 24-hours per day.
Weather data can be delivered direct to client servers, requested from our website or database using our own API or delivered via ZE. Non ZEMA users can also download data directly from the Speedwell web site and access a number of tools including the Monthly/Weekly Statistics Extractor, the Analogue Years Calculator and the Index Calculator Tool.
Recent additions to SuperPack include the addition of over 200 regional crop baskets and the expansion of the Speedwell population weighted baskets which now cover over 70 countries. Data density has been increased in Europe, with the addition of a further 1,000 sites in Germany alone. We have expanded the range of hourly data availability for hundreds of sites in Australia, and added a further 6,000 sites offering hourly temperature observations in the USA. Coverage in South America continues to grow with recent additions to our data in Brazil, Argentina, and Colombia.
About Speedwell Weather
Founded in 1999, Speedwell Weather provides quality weather data, weather forecasts, software, and consultancy. From offices in the UK and the USA we serve clients world-wide in sectors including weather-risk management, energy, insurance, and agriculture. Our data products include SuperPack® which provides unlimited access to our thousands of high quality world-wide weather data sets. Speedwell Weather is the dominant settlement agent for parametric weather risk contracts world-wide.
News from Data Vendors
63December 2014
Opec Member Ecuador Adopts ASCI Price for Crude ExportsOpec member Ecuador’s state-owned oil company PetroEcuador has started pricing its crude exports using the Argus Sour Crude Index (ASCITM) published by global energy and commodity news and price reporting agency Argus. This marks the first consistent use of the ASCI price — a volume-weighted average of US deepwater sour crude deals — to value Latin American crude exports.
PetroEcuador´s Oriente and Napo crude term contract prices are using the ASCI benchmark as an element in an innovative formula to calculate a discount to US benchmark WTI. The formula adjusts for quality and freight.
The ASCI price reflects the volume-weighted average of three medium sour crudes trading in the US Gulf coast market — Mars, Poseidon, and Southern Green Canyon.
PetroEcuador’s decision to switch to the ASCI benchmark illustrates the growing relevance of using international crude price markers that are based on robust transaction volumes. The transactions that make up the ASCI price are published by Argus on a daily basis. Ecuador’s fellow Opec members Saudi Arabia, Iraq, and Kuwait already price their crude exports to the US using the ASCI price.
Ecuador is expected to export more than 400,000 b/d of oil in 2014, rising to 423,000 b/d next year, according to finance ministry projections. PetroEcuador operates various refineries, including 110,000 b/d Esmeraldas, in addition to the Trans-Ecuadorian oil pipeline network (SOTE).
“Argus price assessments are used extensively by governments as independent references for taxation and other purposes,” Argus Media chairman and chief executive Adrian Binks said. “We fully expect other growing and liberalizing economies in Latin America to take similar steps in the near future.”
Argus’ crude and products price assessments are widely used in physical and derivative contracts around the world. Its transparent price assessment methodology has been increasingly adopted throughout the Americas. Argus prices are used by major energy producers and consumers as price references in long-term supply contracts, and by market participants for portfolio mark-to-market, counterparty exposure management, derivatives and a wide range of investment and market analysis purposes.
Contact
London Seana Lanigan +44 20 7780 4272 [email protected]
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Crude Oil Brent vs. WTI: Prompt-Month Contract (NYMEX)
On the New York Mercantile Exchange (NYMEX), prompt-month contracts for Brent and Western Texas Intermediate (WTI) crude oil continued to dive for the sixth month in a row to the lowest levels of the past 12 months. By end of day December 17, 2014, the prices of Brent and WTI had both dropped by 16% and 17% respectively from the previous month. Throughout December 2014, prompt-month contracts for Brent dropped below $70 USD/Bbl to settle at $67 USD/Bbl on December 17, 2014. Meanwhile, the prompt-month contract prices for WTI plunged by $14 USD/Bbl to $63 USD/Bbl. Data from NYMEX future settlements showed that Brent and WTI oil prices traded near four-year lows—Brent and WTI traded at $34 USD/Bbl and $31 USD/Bbl below the last 12-month average. Furthermore, the last 12-month averages for Brent and WTI on NYMEX dropped to $101 USD/Bbl and $94 USD/Bbl, respectively. The Brent-WTI spread (represented by the purple area in the graph above) sat at $3 USD/Bbl this month, which was $4 USD/Bbl below the last 12-month average of $7 USD/Bbl.
Global crude benchmarks roughly followed the same story of the past few months: ample supply and lower demand. This month, worries over weakening global demand combined with signals that OPEC producers will not reduce output weighed on prices in the final days of the month. Saudi Oil Minister Ali Al-Naimi commented on OPEC’s reluctance to curb output without the support of other producers and attempts so far at cooperation have failed.1 It is safe to say that crude has entered a bear market amid the record high US output and signs of slow demand. According to the EIA, US crude stockpiles decreased 0.8 million barrels to 379.9 million in the third week of December.2
1 “Naimi: OPEC Needs More Support for Output Cutdown.” CNBC. December 18, 2014. Accessed December 18, 2014. http://www.cnbc.com/id/102280630#. 2 “Weekly Petroleum Status Report Highlights.” Energy Information Administration. December 17, 2014. Accessed December 18, 2014. http://www.eia.gov/petroleum/supply/weekly/pdf/highlights.pdf.
Monthly M
arket Analysis
December 2014
© Graph created with ZEMA
65
Crude Oil Brent vs. WTI: Forward Curve (NYMEX)
On NYMEX, forward curves for Brent and WTI prices fell in the first three weeks of December 2014 for the next 24 months when compared to the same period in November 2014. The average NYMEX Brent forward prices for delivery until January 2017 (represented by the blue line in the graph above) dropped by $12 USD/Bbl to $77 USD/Bbl, while WTI (the red line) fell by $10 USD/Bbl to an average of $66 USD/Bbl for the same delivery period. The Brent-WTI spread also dropped by 22% to $6 USD/Bbl (the purple area) on average for the next 24 months.
Demand for imports in the United States has significantly reduced as the country is moving toward energy independence due to the ongoing shale gas & oil boom. As of December 18, 2014, OPEC did not take any action to ease a huge global oversupply as the United States’ surge in shale drilling has lifted United States output to the fastest pace in three decades.3 As a consequence, Brent slid as much as 14% for delivery in the next 24 months on expectations that a global oil-supply glut will continue in the coming months. The market expectations are that crude prices will continue to dive to find equilibrium between supply and demand.
3 Zhou, Moming. “Oil Drops to 5-Year Low on Concern Supply Glut to Worsen.” Bloomberg. December 18, 2014. Accessed December 18, 2014. http://www.bloomberg.com/news/2014-12-17/oil-drops-below-56-as-iran- resists-production-cuts.html.
Monthly M
arket Analysis
December 2014
© Graph created with ZEMA
66
North American Natural Gas Spot Prices (ICE)
On the Intercontinental Exchange (ICE), natural gas prices went down in all the observed North American hubs by the end of December 15, 2014, as is expected for a common seasonal trend. When compared to the first 15 days of December 2014, the prices decreased by 6% in New York’s Transco Zone-6 to $3.81 USD/MMBtu, by 12% in Chicago to $3.79 USD/MMBtu, by 8.6% in Henry Hub to $3.68 USD/MMBtu, and by 9.1% in California’s PG&E Citygate to $4.07 USD/MMBtu. Comparing December 2014 prices to last year’s prices, monthly average gas prices decreased in New York’s Z6, Chicago Citygates, Henry Hub, and PG&E by 17%, 13%, 30%, and 12%, respectively. In the first three weeks of December 2014, Chicago Citygates was the most volatile hub with prices ranging from $3.55 USD/MMBtu on December 8 to $4.60 USD/MMBtu on December 1.
For the week ending December 17, 2014, EIA’s “Natural Gas Weekly Update” reported that cold December temperatures boosted natural gas prices.4 According to EIA, working natural gas in storage decreased to 3.3 Bcf as of Friday, December 12 with a net withdrawal from storage of 64 Bcf for the week resulting in storage levels 0.2% above year-ago levels and 7.3% below the five-year average for this week.
4 “Natural Gas Weekly Update—Week Ending November 19, 2014,” U.S. Energy Information Administration, December 17, 2014, accessed December 18, 2014, http://www.eia.gov/naturalgas/weekly.
© Graph created with ZEMA
© Graph created with ZEMA
Monthly M
arket Analysis
December 2014
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Henry Hub Natural Gas Forward Curve (ICE)
On the ICE, the average price of Henry Hub natural gas contracts in the first three weeks of November 2014 for delivery in the next 12 months (represented above by the orange line) went down by 7% to average at $3.65 USD/MMbtu when compared to the same contracts period in November 2014 (represented by the blue line). Data from ICE suggests the spread between December 2014 - January 2016 contracts (represented by the purple bar) averaged at $0.29 USD/MMbtu for the next 12 months. As the purple bars show, the spread has a trend of slowly decreasing gradually for the next two years.
Actual Weather (AccuWeather)
From November 2014 to December 21, 2014, the monthly temperature continued to fall in all observed North American cities due to seasonality. Data from AccuWeather shows Chicago, New York, and San Diego felt colder by 0.17, 5, and 1.76 degrees Celsius (C), respectively, when compared to the previous month. On the other hand, San Antonio was 2.28 degrees Celsius (C) warmer. In first three weeks of December 2014, the average monthly temperatures in the observed North American cities were as follows: San Antonio (15C), Chicago (-4C), New York (1C), and San Diego (17C).
Monthly M
arket Analysis
December 2014
© Graph created with ZEMA
© Graph created with ZEMA
68
Monthly M
arket AnalysisIn December 2014, the two-year average in Chicago, New York, and San Antonio was lower, while San Diego felt warmer. When comparing the past two-year average of December temperatures, this year’s December felt warmer in Chicago, San Antonio, and San Diego by 0.69, 3.32, and 2.39 degrees, respectively. On the other hand, New York was 1.28 degrees below the two-year average. Once more, Chicago experienced the largest weather fluctuations among all the observed cities, as the temperature reached 7C on December 14 and dropped drastically to -15C on December 1.
Electricity: Day-Ahead Prices (ICE)
On the ICE, electricity day-ahead prices decreased in observed North American ISOs by the third week of December when compared to the previous month. From November 2014 to December 2014, electricity day-ahead prices decreased in CAISO SP-15, ERCOT (Texas), and PJM by 9% to $44.62, 20% to $27.72 USD/MWh, and 11% to $41.27 respectively. Warmer temperatures in the Northeast could be responsible for reducing demand and, consequently, pushing the prices lower compared to the rest of the country. Comparing day-ahead pricing of November 2013 with November 2014, CAISO SP-15, PJM, and ERCOT, increased 14%, 23%, and 22%, respectively.
December 2014
© Graph created with ZEMA
© Graph created with ZEMA
In DepthConverging Power and Natural Gas Markets Raise More
Questions for Data Management
By Peadar Walsh
69
The once fragmented US and European power markets have changed significantly over the past few years as a result of market expansion and convergence between practices. Many independent system operators (ISOs) have been expanding in order to enhance reliability and ease cross-border trade.
Similarly, in the case of the global LNG market, future expansion will result in increased cross-border trade among North America, Europe, Asia, and Australia. As such, LNG freight and shipping routes will evolve and become more flexible.
With these markets constantly shifting and expanding, data reports are becoming increasingly complex, which has the potential to mystify even the most seasoned analysts. As a result, there has been, and is expected to be, a greater reliance on effective enterprise data management (EDM) solutions as these events continue to unfold.
With these markets constantly shifting and expanding, data reports are becoming increasingly complex, which has the potential to mystify even the most seasoned analysts. As a result, there has been,
and is expected to be, a greater reliance on effective enterprise data management solutions as these events continue to unfold.
December 2014
In Depth
70
North American and European Power Markets Moving towards ConvergenceNorth American and European electricity markets are undergoing a transition of expansion through organized marketplaces and the realignment of practices along interfaces among neighboring markets.
This phenomenon has been occurring since the deregulation of US electricity markets in the mid-1990s and, more progressively, in Europe in the early 2000s. The trend became more prominent, however, in 2013 and 2014 with the wave of mergers among North American ISOs and regional transmission organizations (RTOs) as well as with the unification of the European electricity market into a single entity.
These consolidations are seen as a strategic combination of assets and skills to improve economic direction of energy flows between market areas and to bring flatter regional price differentials and improved price transparency.
MISO Is Constantly Extending its Footprint
Initiatives to eliminate connections in interconnected grids through modifications of the existing tools and processes have been taken on by several system operators, especially by those located in the Midwestern and Southwestern interconnections.
On December 18, 2013, the Midcontinent Independent System Operator Inc. (MISO), the RTO for a large portion of the Midwestern United States, completed the integration of a four-state region of the electric grid across the South into its existing footprint in the Midwest. The change in control extends MISO’s operational market footprints from the Gulf of Mexico all the way to Manitoba, Canada.
Figure 1 illustrates the effects of convergence on location-based marginal price (LMP) data.
Figure 1: MISO LMP contour map following integration of the South (Source: MISO)
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Over the past five years, the amount of market price data for only the day-ahead LMP market has been increasing considerably, ranging from 5,700 LMP data points in 2009 to 6,699 LMP data points in 2014, with a 21% increase in the last year alone. This is illustrated in Figure 2.
PJM-NYISO Market-to-Market Coordination
In an effort to improve coordination of power transactions, enhance efficiency, and provide cost-savings to consumers, the New York Independent System Operator (NYISO), Pennsylvania-New Jersey-Maryland Interconnection (PJM), and ISO-New England (NE) have been attempting to eliminate trade barriers among the North American power markets through the Broader Regional Markets initiatives since 2010.1
On November 4, 2014, PJM and NYISO announced that they are streamlining the flow of energy across their mutual borders. The two grid operators implemented a coordinated transaction scheduling (CTS) system to help market participants access the latest source of power and more efficiently use the transmission lines connecting the two regions—lowering the combined energy production costs of the two systems. This increased flow of energy will ultimately translate into greater price convergence between the two regions.2
Expansion of SPP Market into Eastern and Western Grid Interconnections
Another major expansion occurred on November 10, 2014 with the Federal Energy Regulatory Commission’s (FERC) approval to expand the size of the Southwest Power Pool’s (SPP) footprint. SPP will more than double the size of its footprint to include three new members that will span the Eastern and Western connections of the US electric grid to include the Western Area Power Administration’s Upper Great Plains, Basin Electric Power Cooperative, and Heartland Consumers Power.3
The expansion will cover 9,500 miles of transmission lines, servicing three million customers across seven states, including Iowa, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. SPP plans to take on reliability coordination of its three new members starting in June 2015, with full membership beginning in October 2015.
MISO Day-Ahead Market LMPs
8000
6000
4000
2000
0 Dec. 1, 2009 Dec. 1, 2010 Dec. 1, 2011 Dec. 1, 2012 Dec. 1, 2013 Dec. 1, 2014
Figure 2: MISO day-ahead market LMPs (December 2009 - December 2014) (Source: MISO)
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Renewable Generation and Energy Markets A growing share of renewable resources in the generation portfolio has been pushing balancing authorities to evaluate and revise existing energy balancing practices. The US Pacific Northwest, with some of the most aggressive renewable generation portfolios in the nation, takes the lead.
The Bonneville Power Administration (BPA) implemented Intra-Hour Scheduling Pilot Program in 2011, allowing for scheduling energy transmission in 15-minute intervals. Afterward, California Independent System Operator (CaISO) joined BPA’s initiative.
On November 1, 2014, CaISO and PacifiCorp began operating a real-time energy imbalance market (EIM), implemented to better integrate renewable generation into the grid across California, Oregon, Washington, Utah, Idaho, and Wyoming. NV Energy will also begin participating in the EIM in October 2015.
Figure 3 illustrates the extent of CaISO’s footprint across the Southwest.
Energy transfers between balancing authorities have been predominantly scheduled according to hourly intervals. The dispatch of generation and load data at 15-minute intervals will further add to the data management challenge by creating more stress for the data exchange velocity and storage.
Power Markets Become Integrated in Europe
On the other side of the Atlantic, electricity market integration has been progressing since Denmark, Finland, Norway, and Sweden ratified a market splitting model following the liberalization of the electricity market in the 1990s. France, Belgium, and the Netherlands integrated their markets (Central Western Europe – CWE) in 2006. Germany, Luxemburg, and Great Britain joined the CWE in 2010 and 2011 respectively. Spain and Portugal coupled their markets in 2007, Czech Republic and Slovakia in 2011, and Italy and Slovenia in 2011.
December 2014
Balancing Authority Areas California ISO PacifiCorp NV Energy
CAISO footprint and PacifiCorp and NV Energy electric service territories
Figure 3: CaISO footprint expanding throughout PacifiCorp’s electric service territory (Source: CaISO)
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The latest step of European market integration took place on November 19, 2014, with the creation of a coupled day-ahead electricity market of OTE in Czech Republic, HUPX in Hungary, OPCOM in Romania, and OKTE in Slovakia.
Just nine months prior, the price coupling of northwestern Europe occurred on February 4, 2014, which provided day-ahead trading in Belgium, Denmark, Finland, France, Germany, Austria, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Estonia, Sweden, and the United Kingdom.4
In Figure 4, the dark blue area represents a fully coupled day-ahead market as of February 4, 2014. Spanish and Portuguese markets coupled on May 13, 2014, which is represented by the orange area. Italy is expected to operate a fully coupled day-ahead market by 2015.
The expansion between these countries is considered a step towards enhancing reliability by easing cross-border trade and increasing competition between suppliers. The further expansion of interconnected borders will demand a greater need for coordination between market participants.
As European power markets converge, data sources associated with these markets will also go through changes. Market participants have to watch very closely how data reports, especially from the key data providers such as EPEX SPOT and APX, are being transformed. With consolidation occurring so quickly and frequently, this task can be very challenging for those with limited resources in dedicated data monitoring function.
But it isn’t only the power markets that are shifting; natural gas markets are also experiencing significant changes.
Global LNG Trade: More Opportunities and More Intricacies
Because of the sudden surge in shale gas production in recent years, the natural gas markets have undergone a fundamental shift. As of 2012, North America leads the world in shale gas production, growing by an average rate of 1.6% per year.5 Up until 2009, the majority of total
December 2014
Figure 4: Fully coupled day-ahead electricity market in Europe (Source: ACER)
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US shale gas production came from the Barnett shale. However, in the last few years, production from other plays, particularly the Haynesville and Marcellus, is increasing rapidly. Figure 5 represents the increase in US natural gas production between 2010 and 2013.
According to the EIA’s Annual Energy Outlook 2013, shale gas production is predicted to almost double between 2013 and 2040.6
The price of natural gas is an important factor in the rapid increase in shale gas production in the United States. Since 2006, the development of shale gas resources has spurred growth in natural gas production, with producers seeing opportunities as a result of growing demand from abroad. The EIA predicts that the United States will export approximately 3.6 trillion cubic feet of natural gas annually by 2040.7
In the case of the global LNG market, North American suppliers have been challenged to keep pace with demand. Europe and Asia are major areas of interest for North American LNG. North American LNG companies have been making efforts to enhance their positions in the European market by creating long-term LNG contracts that are beneficial for European consumers and that can be delivered to European spot markets.
For example, in June 2014, Gas Natural from Spain signed a 20-year contract with Cheniere that links natural gas prices to the US spot market for Henry Hub.8 BG Group signed a similar contract with Cheniere in 2011. Growing exports of LNG from North America and a more globalized gas market will likely lead the US Henry Hub price benchmark to become the driver of natural gas prices in Europe. The graph in Figure 6 represents similar prices at global trading benchmarks for Henry Hub and National Balancing Point (NBP).
December 2014
Figure 5: US natural gas production has been undergoing an increasing trend (Data Source: EIA)
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Figure 6: ZEMA graph comparing prices at global trading benchmarks for Henry Hub, Brent, and NBP (Data Source: NYMEX)
On November 21, 2011, Norwegian Statoil signed a 13 billion GBP supply agreement with UK utility Centrica that links natural gas prices to NBP benchmarks.9 Centrica also signed an agreement with Qatar for 2.4 million tons (3.26 bcm) per year of LNG supplies.10 Henry Hub may soon play the same role in Japan, thanks to approval of several LNG export facilities in the United States. In September 2014, the US Department of Energy approved the export of LNG to non-Free Trade Agreement countries, such as Japan and other Asian countries, representing a significant milestone for the industry. FERC approved the Sempra Energy’s LNG export terminal in Louisiana and Carib Energy’s smaller terminal in Florida.11 They are the second and third facilities approved to export LNG to the Asia-Pacific region.
Canada is the fourth-largest exporter of natural gas in the world. Although Canada has intentions to export LNG, plans for seven LNG terminals have either been cancelled or suspended due to political and economic factors.12 Australia is poised to become the largest supplier of LNG in the world and to become a leading exporter of LNG to the Asia-Pacific region once LNG export terminals come on line. Australian LNG exports are forecast to climb to 83 million tons a year by 2020, compared with 79 million tons for Qatar.13 East Africa may emerge as a strong competitor to Qatar and Australia in the battle to capture key export markets in Asia.
As future LNG markets expand throughout the world, LNG routes will evolve and become more flexible. This is apparent in Figure 7, which represents current cross-border LNG trade among North America, Europe, Asia, and Australia.
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Figure 7: Future global LNG trade routes (Source: Citi Investment Research and Analysis)
As LNG supply, terminals, plants, shipping, liquefaction capacities, trade contracts, and net exports increase, so will the volumes of data associated with them.
This data boom leads to a special use case of the data management mess, where power, natural gas, and other energy and commodity market participants face a deluge of market data from multiple sources. Such a wealth of data can be exceedingly complicated to correlate and interpret using manual data collection and management processes. As the data requirements of these markets are complex and constantly expanding, finding ways to efficiently track, manage, organize, and store data is among the most significant challenges.
When it comes to addressing this challenge, many energy companies are confronted with the decision of implementing an Enterprise Data Management (EDM) solution to support their operational needs.
The Enterprise Data Management SolutionIn order to meet the challenges of shifting energy markets and the volumes of accompanying data, many companies with strong IT departments are attracted to the idea of building one-off software solutions created solely for their business. However, creating software from scratch is, in most cases, an unnecessary risk. Research suggests that 31.1% of software development projects will be cancelled at some point during development, and more than half will cost at least 189% of organizations’ original estimates. On average, only 16% of build projects will be successful and will often have less functionality than originally intended.14 As well, the average time-to-market of an EDM software development project is three years. Overshooting timelines is extremely common, as those projects that make it to some form of completion will often require re-design and revaluation. Restarts are another major issue that disrupts these projects, often resulting in their cancellation before they even near completion.
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Buying a commercial, off-the-shelf EDM reduces the time-to-market risks inherent in building an EDM solution internally. Software companies exist solely for the purpose of developing robust and efficient software solutions. Even an organization with a very strong IT department will not have nearly the level of expertise and dedication as a business that is devoted entirely to developing software products. For this reason, when a business opts to purchase a solution rather than attempting to create it themselves, they aren’t just buying the product—they are also buying the thousands of hours of research and development that went into its creation and continual maintenance.
The majority of issues faced by businesses are not uncommon. As such, a software company with proven success developing solutions for a particular industry will have gained valuable insights from helping other businesses that have faced similar challenges. Nearly all software vendors incorporate suggestions from end-users to create continuous updates to functional-ity; the solution will continue to evolve, adding value without requiring constant investment of capital and resources.
Request ZE’s white paper “Weighing the Options: Build an Internal EDM System or Get ZEMA” to learn more.
December 2014
Bibliography1. Edelson, David. “Broader Regional Markets.” New York Independent System Operator. May 24, 2014. Accessed December 5, 2014. http://www.nyiso.com/public/webdocs/markets_operations/committees/ bic_miwg/meeting_materials/2010-05-24/Broader_Regional_Markets_Initiatives_Updates.pdf.
2. “PJM, NYISO Implement Coordinated Transaction Scheduling.” New York Independent System Operator. November 5, 2014. Accessed December 5, 2014. http://www.nyiso.com/public/webdocs/media_room/ press_releases/2014/PJM NYISO Implement Coordinated Transaction Scheduling - 11 5 14 - FINAL.pdf.
3. “Order Conditionally Accepting in Part, Rejecting in Part, Accepting and Suspending Filings in Part, Establishing Hearing and Settlement Judge Procedures and Consolidation Proceedings and Directing Compliance Filing.” United States of America Federal Energy Regulatory Commission. November 10, 2014. Accessed December 5, 2014. http://www.ferc.gov/CalendarFiles/20141110183532-ER14-2850-000.pdf.
4. “Market Coupling A Major Step Towards Market Integration.” EPEX SPOT. Accessed December 7, 2014. http://www.epexspot.com/en/market-coupling.
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About ZE PowerGroup Inc.: ZE is an experienced software and strategic consulting firm that combines energy industry expertise with advanced software development capabilities. ZE is the developer of ZEMA, a sophisticated enterprise data management and analysis solution built to meet the challenges of participants in energy and commodities markets.
About ZEMA: ZEMA is an enterprise data management software designed for collecting data and performing complex analysis. ZEMA replaces fragmented data management processes with a sophisticated, unified, and automated system. Each ZEMA component is modular and scalable, giving clients greater flexibility when integrating it into their organizations. The solution is easy to use and backed by ZE’s support team around the clock. It has been ranked first in the Energy Risk Awards “Data Management House of the Year” category for five years in a row. In Energy Risk’s annual software survey and rankings, it is also consistently rated by end users as first in the “Preferred System,” “Ease of System Integration,” and “Customer Service” categories.
Disclaimer: ZE DataWatch is a report comprised of data updates and expectations for energy and commodities markets, powered by ZEMA. The news contained in ZE DataWatch is for information purposes only. Although ZE PowerGroup believes the information in this report to be correct, the organization does not warrant the accuracy or completeness of it. Information in this report is not intended to provide financial, legal, accounting, or tax advice and should not be relied upon in that regard. ZE PowerGroup is not responsible in any manner whatsoever for direct, indirect, special, or consequential damages, howsoever caused, arising out of the use of this report.
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5. “Annual Energy Outlook 2014.” US Energy Information Administration. May 7, 2014. Accessed December 8, 2014. http://www.eia.gov/forecasts/aeo/mt_naturalgas.cfm.
6. “Annual Energy Outlook 2013.” US Energy Information Administration. April, 2013. Accessed December 8, 2014. http://www.eia.gov/forecasts/aeo/pdf/0383(2013).pdf.
7. Ibid.
8. Toyer, Julien. “Cheniere, Gas Natural LNG Deal worth $13 Billion: Source.” Reuters. June 2, 2014. Accessed December 9, 2014. http://www.reuters.com/article/2014/06/02/us-cheniere-energy-gas- natural-idUSKBN0ED1SS20140602.
9. “Centrica Establishes Strategic Partnership with Statoil and Announces £1bn Norwegian Asset Acquisition.” Centrica. November 21, 2013. Accessed December 9, 2014. http://www.centrica.com/index.asp? pageid=1041&newsid=2275.
10. “Centrica Signs £2bn Gas Deal with Qatar to Secure LNG for the UK.” Centrica. February 23, 2011. Accessed December 9, 2014. http://www.centrica.com/index.asp?pageid=1041&newsid=2163.
11. “North American LNG Import /Export Terminals Approved.” United States of America Federal Energy Regulatory Commission. December 3, 2014. Accessed December 10, 2014. http://www.ferc.gov/industries/gas/ indus-act/lng/lng-approved.pdf.
12. Yee, Adrian K. “North American LNG Projects: Political and Economic Factors.” ZE DataWatch. November 28, 2014. Accessed December 10, 2014. http://www.datawatch.ze.com/in-depth/north-american-lng-projects- political-and-economic-factors.
13. Sharples, Ben. “Australian LNG Contracts Under Pressure From U.S., Russia Supply.” Bloomberg. September 9, 2014. Accessed December 10, 2014. http://www.bloomberg.com/news/2014-09-09/ australian-lng-contracts-under-pressure-from-u-s-russia-supply.html.
14. “Chaos.” The Standish Group. 1995: 2. Accessed November 26, 2014. http://www.projectsmart.co.uk/docs/ chaos-report.pdf.