Global Commodity Exchange Map for EEX Group in 2020

The global commodity exchange EEX Group’s growth path marches on for 2020, with 2018 and 2019 outstanding years.

The group’s global positions are: number one in power, number two in emissions, and number three in natural gas. It has an established presence in Europe, Asia and North America, connecting more than 600 trading participants from 36 countries worldwide via 17 offices worldwide.

Traders have faced many uncertainties such as MiFID II (Markets in Financial Instruments Directive) and Brexit. Yet for 2018, group sales revenue increased by 19 percent to €267.7m.

The group generated significant volume growth in power (up 32 percent) in the spot and derivatives markets — maintaining its position, for the second consecutive year, as the number one global exchange in power trading.

In the natural gas market, the group saw major volume growth in the short end of the curve, with the spot markets achieving double digit growth rates (up 33 percent) compared to the previous year.

Its emissions business also saw success in 2018, more than doubling its overall volume, recording a year-on-year increase of 110 percent. Futures and options, in particular, saw growth in trading.

The group aims to continue to complete its product range in existing and new markets. In the power futures markets, EEX has continuously expanded its regional reach to 17 market areas over recent years.

In 2019, it continued to expand by launching products for the south-eastern European market — including Bulgaria, Serbia and Slovenia — in co-operation with local partners. On EEX’s gas platform PEGAS, products for 12 European gas hubs are currently available, including the recently launched offering for Spain.

Plans for the future include an increase in market share in existing markets. EEX is in constant dialogue with its customers to develop its product range and increase liquidity.

To this end, it is working to reduce market entry barriers for new and existing customers. This includes solutions to fulfill regulatory obligations in commodity markets: One example is the group’s regulatory reporting services for different regulations such as MiFID II, EMIR, MAR, and REMIT.

The group will continue to put forward innovations in the energy and commodity sectors, as shown by its engagement in the ENERA project or the B2B platform “enermarket”.

EEX will also evaluate an extension of its offering for long-term trading by adding Cal maturities up to Y+10 in order to support long-term PPA hedging.

The group will also continue to explore inorganic growth opportunities which could contribute to its vision of a preferred Global Commodity Exchange Group.

The acquisition of Grexel enables it to further develop the markets for energy certificates in Europe. (Since February, Grexel Systems has been fully owned by EEX.)

The group has recently redefined its Asian business with the launch of EEX Asia and Cleartech. The strategic repositioning under two separate brands enables better service for clients through greater focus and specialisation in each business area.

EEX Asia is now the Asian Exchange of EEX Group, offering futures contracts on freight and seaborne commodities such as fuel oil and iron ore, with contracts clearing through ECC (European Commodity Clearing).

In March 2019, Nodal Exchange introduced Trucking Freight Futures – the world’s first exchange contract. In May, PEGAS launched an LNG contract based on the Japan-Korea Marker index.

In July 2019, EEX Group announced its plans to extend its Power Derivatives offering in the first half of 2020 by launching Trade Registration services for Japanese Power Derivatives.

Following meetings with the Ministry of Economy, Trade and Industry (METI), it confirmed plans to launch clearing services for financially-settled Japanese power derivatives is allowed under the Japanese Commodities Derivatives Act.

In September, Powernext and EEX announced their intention to merge, subject to required regulatory and stakeholder approvals. The exchange will offer all products at a single marketplace while simplifying the admissions of new participants.

Members will be able to easily trade a larger EEX portfolio including gas, power and emission allowances. As a result, customers will gain access to increased trading opportunities and a growing liquidity pool, while continuing to benefit from cross margining effects as ECC will remain the central counterparty for clearing transactions.

In November, EEX Group and US-based Nasdaq Futures (NFX) announced that they had reached an agreement to sell NFX’s futures and options exchange business to EEX Group. EEX Group will acquire the core assets of NFX, including the portfolio of open interest in NFX contracts.

The transaction involves the transfer of existing open positions in US Power, US Natural Gas, Crude Oil, Ferrous Metals and Dry Bulk Freight futures and options contracts to EEX Group’s clearing houses Nodal Clear and ECC.