TTF breaks the 4000 bcm barrier

The global gas wheel keeps turning on: despite falling gas demand trading on TTF jumped by 20% in 2020, breaking the 4000 bcm mark for the first time ever.

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Growth has been almost entirely driven by exchanges, accounting now for 40% of volumes traded on TTF compared to 6% back in 2013 when TTF was effectively a regional trading hub.

The rise in exchange cleared volumes vs bilateral OTC trades suggests that TTF is increasingly used by “outsiders” to the European gas market, including global portfolio players, traders as well as financial institutions.

Growth has been particularly strong in December with volumes up by 33% yoy, despite LNG imports plummeting by 40%.

The strong price volatility on the global LNG market translated into an increasing appetite for hedging and risk management.

All in all liquidity and market depth continued to improve, with TTF’s churn averaging at 90 (vs 60 for Henry Hub).

TTF is gradually becoming the global gas wheel, highlighting the unique balancing role of Europe is an increasingly interlinked and flexible global gas market.

What is your view? What is next for TTF? Will trading continue to rise in the coming years? And when we will see a truly liquid Asian gas hub emerge?

Source: Greg Molnar

See original post by Greg at LinkedIn.