New German futures post record month, with EUAs also surging

German futures contracts (Phelix-DE) recorded their highest trading volume since their launch. A total volume of 22.9 TWh was traded in August this year. Emission allowances also saw significantly higher trading, with volumes up 150% year-on-year from August last year.

The new German contracts introduced on the Leipzig exchange this year are relatively popular, with their trading volume reaching a new high despite the summer months. The contract was only launched in April this year. This is partly a response to the expected split of the German-Austrian bidding zone.

The split of the joint zone is currently planned for October 2018, which is why some traders are already opting for separate contracts for either the German or Austrian zone for 2018 contracts.

The contract’s popularity is also clearly evident from the gradual increase in trading volume: while “only” 8 TWh of electricity was traded in May, this rose to 12 TWh in June and 15 TWh in July. This month saw the most significant increase, totalling more than 50%.

However, the total volume of electricity traded fell by around 10% to 179 TWh.

A completely opposite trend can be observed in the emissions allowance market. Compared with 33 million tonnes last year, a total of 86 million tonnes of emissions were traded this year. Higher trading activity is likely also linked to the upcoming reform of emissions trading, with further talks on the future form of the emissions allowance market due to take place in the middle of this month.

The higher trading volume of allowances was also reflected in their higher price. Since the beginning of July, the price rose from below EUR 5 per tonne to EUR 6/t before the end of August. However, on the first trading day of September, the allowance again fell below the EUR 6 mark and closed on EEX at EUR 5.8/t.