February 2013

datawatch
Argus expands to chemical and fertilizer sectors DoEs solar data analysis to improve Europes natural gas virtual storage by Vattenfall

D ata n e w s f o r e n e r gy a n d c o m m o d i t i e s m a r k e t s

NYSE opens new office in Philippines

How Renewables Shape the Future

by KYOS Energy Consulting
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February 2013

datawatch Summary
p. 3
New Interest Rate Derivatives Launched by BM&FBOVESPA Exchange Traded Bonds and Sukuk Launched on Bursa Malaysia ComStage ETF S&P SMIT 40 launched on Xetra EGX and NYSE Liffe to List EGX 30 Index Futures Xetra: Five db X-trackers on CSI300 Sector Index Family HKEx Introduces New ETF Options ISE Introduces ISE ETF Ventures Clearstream on the Offshore RMB Market Clearstream and Belfius Expand Global Services to OTC Markit Launches Markit CMBX Series 6 Eurex Repo Offers Funding for GC Pooling and Euro Repo Markets CME Delists 2 -Year Treasury Note vs.2-Year Deliverable IR Swap TOCOM Delists Nikkei-TOCOM Index Future

Editorial

Once again, US President Barack Obama called for a continued fight against climate change. This time, it was during his State of the Union speech. In it he urged Congress to develop a market-based solution that would mitigate the impact of climate change I couldnt resist revisiting the last decade of such bills that have gone through Congress. None of them has ever become law.

Data News
Power Markets
Argus Expands its Forward Curve Services US DoE Announces New Data-Driven Solar Initiatives NASDAQ OMX Launches German Power Futures NGX Extends Tenor of Canadian Power Products to 96 Months

p. 4

Other Matters

p. 15- 16

Fossil Fuel Markets

p. 5-8

CME Adds to its Natural Gas OTC Offering ICE Introduces Oil Swap Futures Europe ICE Launches API 8 South China Coal Futures Asian Coal Market Evolves with API 5 Coal Index Argus Launches Marine Fuels Pricing and Analysis Service Platts to Publish Midpoints for LPG Assessments Platts Launches Durban MGO Assessment Platts to Add Points on Transco and Tennessee Gas Pipelines Vattenfall Creates Standard Product for Virtual Gas Storage Two Oil UBS ETFs Launched on Xetra Platts to Discontinue Reporting of Tennessee Gas Pipeline, Zone 4-Ohio CME Denatures Fuel Ethanol Forward Month Futures CME Expands European Gasoil (100mt) Bullet Futures CME Expands Heating Oil Calendar Spread Option Listing ICE Amends Specs for Heating Oil and Related Inter-Product Spreads Platts to Change Basis for US Ethylene and Propylene Assessments

Department of Energys ESnet Launches New Map Tool EIA Expands API Options with State Energy Data CBOE Launches Customized Option Pricing through MDX NYSE Expands Asian Offerings with NYSE Philippines Inc. Clearstream and 360T To Launch Pioneering Triparty Repo Service New Data Centre Opened by HKEx in Tseung Kwan O Liquidity Alliance Launched to Address Global Collateral Crunch

ZEMA Market Dashboard

Actual Weather (AccuWeather) North American Natural Gas Spot Prices (ICE) Henry Hub Natural Gas Forward Curve (ICE) North American Electricity Day-Ahead Prices (ICE) Crude Oil Brent vs. WTI (NYMEX) - Prompt-Month Contract Crude Oil Brent vs. WTI (NYMEX) - Forward Curve

p. 17 - 18

News from Data Vendors

p. 19 - 20

Agriculture, Forestry and Metal Markets

BM&FBOVESPA Launches Derivatives for Sugar/Ethanol TOCOM Launches New Corn, Bean and Sugar Contracts Platts to Publish Iron Ore Lump Contract Price Premiums NCDEX Launches New Gold Futures CME Lists Platinum Options and Palladium Options ICE Launches Iron Ore Contracts Xetra Launched Four Precious Metals ETF CME Delists International Skimmed Milk Powder Products Argus Acquires Fertilizer and Chemical Consultancy Platts Updates US Aluminum Specifications

p. 9-10

Carbon Market Data Releases Phase III Data on the EU ETS EPEX SPOT SE: Power Trading Results in January 2013 EPEX SPOT SE: North-Western European Price Coupling in Good Progress OTC Global Holdings Launches Power Implied Volatilities OTC Global Holdings Completes Gas and Power Data Suite New Data Reports for ZEMA

Environmental Markets and Weather Services p. 11

China Partners with AccuWeather for Worldwide Weather Distribution NASDAQ OMX Commodities Adds to the Nordic and Carbon Product Offerings BM&FBOVESPA and BNDES Develop Carbon Efficient Index

In Depth

p. 21 - 24

How Renewables Shape the Future by KYOS Energy Consulting

In 2012, the German capacity of solar energy passed the 32 GW mark. The impact on the market prices is noticeable: summer prices go down, peak prices go down especially midday, and gas fired power generation plants have difficulty making money. In this article, we take a detailed look at how this is further going to shape future price levels.

FX, Interest Rates, Credit and Equity Indexes p. 12 - 14

CME Lists Standard and E-micro USD/Offshore RMB Futures CME Lists Standard and E-micro Indian Rupee/USD Futures

February 2013

datawatch Editors letter

No matter how much attention oil and natural gas sectors have been drawing in recent times, renewable power generation continues to maintain significant attention from media circles and government programs. Once again, US President Barack Obama called against climate change. This time, it was during his State of the Union speech. In it he urged Congress to develop a market-based solution that would mitigate the impact of climate change. If the Congress fails to act, the White House will do so through executive actions. After hearing this, I thought this wasnt the first time this sort of legislative action has been considered. A cap-and-trade system formed the cornerstone of several climate bills that have been reviewed by US Congress. I couldnt resist revisiting the last decade of such bills that have gone through Congress. None of them can be referred to as a success as none of them has ever become law: S. 843 Clean Air Planning Act of 2003 proposed a nation-wide, cap-and-trade system to set up tonnage caps for nitrogen oxides, sulfur dioxide, mercury, and carbon dioxide. H.R. 5049 Keep America Competitive Global Warming Policy Act of 2006 considered the introduction of a mandatory market-based cap for all large emitters with allowances trading mechanism. The program permitted a safety valve ($7 per ton of CO2) when the price can only increase if the President and Secretary of State certify that other countries are controlling their emissions. S. 309 Global Warming Pollution Reduction Act allowed the EPA to determine the mandatory market-based system and aimed to bring CO2 emissions 80% below 1990 levels by 2050. S. 280 Climate Stewardship and Innovation Act of 2007 called for a mandatory market-based cap for all large emitters resulting in a 60% emission reduction below 1990 levels by 2050. S. 485 Global Warming Reduction Act of 2007 promised to freeze emissions in 2010 and to gradually reduce to 65% below the 2050 levels. S. 1766 Low Carbon Economy Act of 2007 established a mandatory GHG allowance program to maintain emissions at approximately 2006 levels in 2020, 1990 levels in 2030, and at least 60% below 1990 levels by 2050. S.2191 Americas Climate Security Act of 2007 a.k.a. the Lieberman-Warner bill, which would have aligned US with the Kyoto goals by creating a national cap-and-trade scheme for greenhouse gas emissions, where emitters would be allocated allowances. The cap would get lower over time, and in 2050, emissions would be reduced to 63% below 2005 levels. H.R. 2454 American Clean Energy and Security Act of 2009, also known as the Waxman-Markey Bill - was approved by the House on June 26th, 2009. The bill proposed the introduction of a federal RPS and GHG cap-and-trade program calling for emissions reductions of 17% by 2020 with energy efficiency features. S. 1733 Clean Energy Jobs and American Power Act of 2009, the Kerry-Boxer Bill, was proposed in the Senate as an alternative to H.R. 2454. The bill sought an emissions reduction of 20% by 2020. S.2877 Carbon Limits and Energy for Americas Renewal Act of 2009, introduced by Sens. Maria Cantwell (D-WA) and Susan Collins (R-ME), considered capping carbon dioxide emissions and allowing very limited emissions trading. A draft discussion American Power Act of 2010 by Sens. John Kerry (D-MA), Joseph Lieberman (I-CT) proposed a cap-and-trade program on greenhouse gas emissions and called for reducing carbon pollution by over 80% in 2050. I may have missed out on a few bills from the list above. In any event, what will be of most interest now is to see is if the odds are high for this bill to be more successful than its predecessors this time round.

Editor

Olga Gorstenko Phone: 778-296-4183 Email: olga@ze.com

Advertising & Vendor Relationships

Bruce Colquhoun Phone: 604-790-3299 Email: bruce.c@ze.com

ZEMA Suite Inquiries

Bruce Colquhoun Phone: 604-790-3299 Email: bruce.c@ze.com

Olga Gorstenko

Have an idea for an article or would like to contribute to an upcoming issue? Write to us at datawatch@ze.com To access previous issues of ZE DataWatch, go to datawatch.ze.com

datawatch February 2013 Argus Expands its Forward Curve Services

On January 9, 2013, Argus launched new implied volatility curves for North American electricity and natural gas, expanding its suite of forward curve services. To establish the market value for electricity and natural gas locations and forward periods that stretch to a minimum of two years, daily assessments of the volatilities must use a wide range of data sources. When locations and terms are illiquid, the basis for establishing fair market values are locational spreads and time spreads. The new implied volatilities can be used to validate internal price curves, assess risk on energy transactions, forecast trends and evaluate physical and financial assets.

Power Markets
Extension of the German The extended forward curve will cover Power Forward Curve 6 monthly, 8-11 quarterly and 5 yearly contracts. Extension of the Nordic The extended forward curve will cover Power Forward Curve up to 10 yearly contracts and the new contracts will have the same technical setup in regards to delivery and settlement procedures. Introduction of Swedish Products will be Euro denominated and Norwegian Electricity covering daily spot contracts and 5 yearly Certificates forward contracts with March expiry dates. Alberta Super Peak Fixed for Floating (AESO) Ontario Ext Off Peak Fixed for Floating (IESO) Ontario Ext Peak Fixed for Floating (IESO) Ontario Flat Fixed for Floating (IESO) Ontario Off Peak Fixed for Floating (IESO) Ontario On Peak Fixed for Floating (IESO) Alberta Ext Peak Index Floating (AESO) for Floating (RRO) Alberta Flat Index Floating (AESO) for Floating (RRO)
All new and extended products are subject to successful testing which is ongoing as of January 24, 2013.

US DoE Announces New DataDriven Solar Initiatives

On January 30, 2013, the Department of Energy (DoE) announced seven projects aimed at improving data analysis to find new opportunities in solar energy development. The set of projects, named the SunShot Initiative, will run in California, Colorado, Connecticut, Massachusetts, North Carolina and Texas. Through these initiatives, the goal is to achieve viable methods to increase the effectiveness of solar deployments, from manufacturing to final implementation. With a $9 million investment, DoE hopes to fund research teams from various universities and labs from around the country. These teams will apply statistical and computational tools to datasets provided by industry players such as utilities. By working directly with utilities that operate in the solar power market, it is hoped that this research will accelerate technological breakthrough and reduce costs associated with the technology.
For more information about this initiative click here.

NGX Extends Tenor of Canadian Power Products to 96 Months

Effective January 21, 2013, NGX extended the tenor of all of its Alberta and Ontario power products to 96 months. Power products will be available for trading out to January 2021 on WebIce on the effective date. The products will roll forward 96 months as each month rolls off the current calendar. Below is the list of impacted future products: Product Alberta Ext Off Peak Alberta Ext Peak Alberta Flat Alberta Off Peak Alberta On Peak Alberta Super Peak Ontario Ext Off Peak Ontario Ext Peak Ontario Flat Ontario Off Peak Ontario On Peak Alberta Ext Peak Index Alberta Flat Index Description Fixed for Floating (AESO) Fixed for Floating (AESO) Fixed for Floating (AESO) Fixed for Floating (AESO) Fixed for Floating (AESO) Fixed for Floating (AESO) Fixed for Floating (IESO) Fixed for Floating (IESO) Fixed for Floating (IESO) Fixed for Floating (IESO) Fixed for Floating (IESO) Floating (AESO) for Floating (RRO) Floating (AESO) for Floating (RRO)

NASDAQ OMX Commodities Launches New German Futures and Options

On January 9, 2013, NASDAQ OMX Commodities announced that it will launch new products in Genium INET. Genium INET will be upgraded to version .0222 during the weekend of March 23-24, 2013. Five power product lines will be created and extended: Product Extension of German Power Futures Launch of European Style Options for German Power Forward and Futures Description German product offering will be extended to include 6 monthly, 8-11 quarterly and 5 yearly futures contracts. A suite of European Style options will be launched on monthly, quarterly and yearly German Forwards and Futures contracts.

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datawatch February 2013 CME Adds to its Natural Gas OTC Offering
On January 25, 2013, CME Groups European clearing house announced the addition of two new over-the-counter European natural gas forward contracts for launching on 25 February 2013, subject to approval by the Financial Services Authority. The newly listed forward contracts are: the United Kingdom National Balancing Point Natural Gas Physically Delivered and the Netherlands (NL) Title Transfer Facility Natural Gas Physically Delivered. The addition of European natural gas to CME Groups suite of global energy products provides market participants with new trading strategies to manage risk in the natural gas market. These products offer online access to straight-through-processing, which means instant trade confirmations and real-time clearing for the natural gas market. These contracts are listed for clearing on CME ClearPort and are subject to the rules of CME Clearing Europe - CME Groups European clearing house. BTM DBL MAM-MBQ MED-MFH

Fossil Fuel Markets

Brent CFD vs Third 1860 Month Swap Future -1000bbl Daily Dated Brent vs 1860 Brent 1st Line Swap Future Urals North vs Dated 1860 Brent CFD Balmo Swap Future Urate Med vs Dated Brent CFD Balmo Swap Future

For TMC contract specifications, click here For FSR contract specifications, click here For EON contract specifications, click here For STB contract specifications, click here For SFB contract specifications, click here For SSB contract specifications, click here For DDB contract specifications, click here For BFM contract specifications, click here For BSM contract specifications, click here For BTM contract specifications, click here For DBL contract specifications, click here For MAM-MBQ contract specifications, click here For MED-MFH contract specifications, click here

ICE Introduces Oil Swap Futures Europe

On February 11, 2013, ICE Futures Europe listed 13 Oil Swap Future contracts for trading, subject to regulatory non-objection. The below ICE Futures Europe Swap Futures contracts are listed on the ICE trading platform and cleared by ICE Clear Europe which will act as a central counterparty to all trades. ICE Code TMC FSR EON Description TMX C5 1b Swap Future Fuel Oil Straight Run 0.5-0.7% FOB NWE Cargoes Swap Future Argus Euro-Bob Oxy FOB Rotterdam Barges vs Naphtha CIF NWE Cargoes Swap Future Singapore Mogas 92 Unleaded vs Brent 1st Line Swap Future Singapore Mogas 95 Unleaded vs Brent 1st Line Swap Future Singapore Mogas 97 Unleaded vs Brent 1st Line Swap Future Daily Dated Brent Swap Future - lOOObbl Brent CFD vs First Month Swap Future -1000bbl Brent CFD vs Second Month Swap Future -1000bbl PGA Page 1850 1850 1850

ICE Launches API 8 South China Coal Futures

On January 28, 2012, ICE announced the launch of the ICE Futures API South China Coal Futures Contract for the trade date February 11, 2013. This new contract is a cash-settled contract, quoted in USD/tonne and will be listed up to six consecutive calendar years in monthly, quarterly and yearly formats. This contract is cleared by ICE Clear Europe who acts as a central counterparty to all trades. ICE Code CRF Description API 8 CFR South China Coal Futures (Argus/IHS McCloskey Coal)

STB SFB SSB DDB BFM BSM

1870 1870 1870 1870 1860 1860

For contract specification click here.

Asian Coal Market Evolves with API 5 Coal Index

On January 18, 2013, the first over-the-counter coal swap deal using the Australian API 5 coal index as a basis was transacted. The deal was brokered by Marex Spectron , with Standard Bank acting as one of the counterparties. The API 5 index represents 5,500 kcal/kg NAR of high-ash coal shipped from Australia. The API 8 index represents the same quality coal shipped to China. As the demand for coal rises in China and India so too does the

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datawatch February 2013

interest in this index, which is viewed as a reliable, independent price assessment among the coal trading community. The introduction of swaps using this index provides producers, endusers and other market participants with more flexibility in their businesses.

Fossil Fuel Markets Platts to Add Points on Transco and Tennessee Gas Pipelines
On January 24, 2013, Platts proposed adding two locations to its daily and monthly bidweek North American spot-price surveys: Transcontinental Gas Pipe Line, Leidy Line receipts and Tennessee Gas Pipeline, Zone 4-200 leg. The daily postings would begin effective trade on March 28, for flow date on April 1, and would appear in Gas Dailys Daily price survey table in the Appalachia section and the Northeast section of Energy Traders Daily spot gas prices table. Monthly bidweek postings would be effective with the late-March bidweek trading for delivery in April (on March 22, 25, 26, 27, 28). They will appear in the Prices of Spot Gas Delivered to Pipelines tables in Inside FERCs Gas Market Report, Energy Trader and Gas Daily Price Guide and the Bidweek Physical Basis Prices Delivered to Pipelines table. The prices also would be published on Natural Gas Alert and in Platts Market Data. The proposed description of the new Leidy line location would be: Transcontinental Gas Pipe Line, Leidy Line receipts (daily and monthly surveys), Deliveries to Transcos Leidy Line downstream of the Leidy/Wharton storage facilities in Clinton and Potter counties, Pennsylvania, to Transcos Station 505 in Hunterdon County, New Jersey. This pricing location does not include transactions at the storage-related interconnects with Dominion Transmission, National Fuel Gas Supply, UGI Storage or Tennessee Gas Pipeline. The proposed description of the Tennessee location would be: Tennessee Gas Pipeline, Zone 4-200 leg (daily and monthly survey) Deliveries into Tennessee at all points of receipt on the 200 line in the states of Pennsylvania and Ohio as well as transactions at Tennessees Station 219 pool.

Argus Launches Marine Fuels Pricing and Analysis Service

On January 7, 2013, Argus launched Argus Marine Fuels. This is a daily marine fuels pricing and analysis service that will add transparency to the increasingly complex international bunker fuels markets. As environmental regulations force ships to use more expensive, low-sulfur fuels, ship-owners and managers are noticing the trade in marine fuels is rapidly changing. The Argus Marine Fuels service offers precise price assessments for high and low-sulfur marine fuels at more than 60 ports worldwide, as well as refueling options at some lesser known ports. A key offering of the service is its pricing of ECA-compliant bunkers in the Atlantic basin, which is critical information for those involved in the marine fuel trade.

Platts to Publish Midpoints for LPG Assessments

Effective March 1, 2013, Platts is proposing to publish midpoints for all global LPG assessments that are not already being published. These assessments will be conducted for propane, butane, ethane and natural gas and will represent the average between the high and low of each market assessment published daily. Midpoint assessments will be published and databased to three decimal places, while the high and low for each assessment will be published to two decimal places only. The method for calculating month-to-date averages, monthly averages and weekly averages will also be updated by Platts. The averages will be published and databased to three decimal places and will be created by averaging each point itself. For example the average high will be the average of the highs for the month or week.

Vattenfall Creates Standard Product for Virtual Gas Storage

On February 1, 2013, Vattenfalls trading unit announced the launch of a virtual storage product for the gas markets in the Netherlands and Germany. By buying and selling this standardized product, Vattenfall aims to support market participants in balancing their gas portfolios and create a liquid market place for gas storage in Europe. As more and more small and mid-size players, especially in Germany, are managing their own gas portfolio, the need for flexibility and transparency in pricing is increasing. The virtual product has the same characteristics and value as a physical gas storage facility but without the associated costs and constraints of operating an actual facility. A Standard Storage Bundle consists out of an injection capacity of 1 MW, a withdrawal capacity of 2 MW and a working gas volume of 2,928 MWh. Customers can choose between a base load product, meaning that the injected or withdrawn volume is constant over the day, and an hourly profile product, meaning that hourly volume can differ and customers can re-nominate. Customers can buy the same product bundle in the size and at the location that they desire. Starting out, the delivery points are Title Transfer Facility, Gaspool and NetConnect Germany. Vattenfall

Platts Launches Durban MGO Assessment

On February 1, 2013, Platts launched a new marine gasoil assessment for Durban, to be assessed on an ex-wharf basis and reflect typical standards as defined in document ISO 8217:2005. This MGO assessment will be published alongside Platts MDO and 180 CST bunker fuel assessments in Durban. Platts Global Alert page 1860, Platts Bunkerwire and the Platts price assessment database will publish the assessment under the code AAXDB00 Marine Gasoil Ex-Wharf Durban. The monthly average for the new assessment will also be published by Platts on Platts Global Alert page 1861 under the code AAXDB03 Marine gasoil Ex-Wharf Durban MAvg.

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datawatch February 2013

has plans to offer the product in Belgium, the Czech Republic, France and the United Kingdom later this year.

Fossil Fuel Markets CME Expands European Gasoil (100mt) Bullet Futures
On February 11, 2013, CME expanded the listing cycle for European Gasoil (100mt) Bullet futures such that January 2015 shall be the last listed contract month. The trading venues are CME Globex and CME ClearPort. These contacts are listed with, and subject to, the rules and regulations of NYMEX. CME Code GLI Description European Gasoil (100mt) Bullet Futures

Two Oil UBS ETFs Launched on Xetra

On January 24, 2013, two new exchange-traded equity index funds issued by UBS (Irl) ETF plc have been tradable in Deutsche Brses XTF segment. The new UBS ETFs from the Structured Solutions Solactive index series enable investors to participate in the performance of international companies, which make their income from the exploration, extraction and/or refining of oil. The new products are aimed primarily at private investors through the A class and at institutional investors through the I class. Description UBS (Irl) ETF plc - Solactive Global Oil Equities (USD) A-dis UBS (Irl) ETF plc - Solactive Global Oil Equities (USD) I-dis ISIN Code IE00B5PYL424 IE00B7KYPQ18

CME Expands Heating Oil Calendar Spread Option Listing

On January 28, 2013, CME expanded the listing of the Heating Oil Calendar Spread Option (one-month) contract from the first three consecutive one-month spreads to the first 35 consecutive onemonth spreads. The new listing is available for electronic trading on CME Globex, open outcry trading on the NYMEX trading floor and for clearing through CME ClearPort. CME Code FA Description Heating Oil Calendar Spread Option

Platts to Discontinue Reporting of Tennessee Gas Pipeline, Zone 4-Ohio

On January 24, 2013, Platts proposed to discontinue publication of its Tennessee Gas Pipeline, Zone 4-Ohio location, occurring no less than six months after publication of a final notice. The publication includes deliveries to Tennessee from the Rockies Express Pipeline in Guernsey and Muskingum counties in East Ohio. The REX/Tennessee interconnect is in Tennessees zone 4. Should Platts go ahead with a new location Tennessee Gas Pipeline, Zone 4-200 leg, transactions delivered to Tennessee would be included in it.

ICE Amends Specs for Heating Oil and Related Inter-Product Spreads
On January 31, 2013, ICE advised members of amendments made to the contract specification for ICE Heating Oil Futures and related Inter-Product Spreads. The amendment clarifies the wording used in the Settlement section of the contract specification and will be valid from March 28, 2013. Attachment 1 lists the full amended ICE Heating Oil Futures (O) specification as well as the heating Oil inter-product spread contracts: Heating Oil/WTI Futures Crack (HO-WBS) Heating Oil/Gasoil (HOGO) Futures Spread (HO-GAS) Heating Oil/Low Sulphur Gasoil Futures Spread (HO-ULS) Heating Oil/Brent Crack Spread (HO-BRN) Heating Oil/Brent NX Crack (HO-BNX) NYH (RBOB) Gasoline/Heating Oil Futures Spread (UHU-UHO) Attachment 2 shows the full amended contract specifications for ICE Heating Oil/ WTI Futures Crack.

CME Denatures Fuel Ethanol Forward Month Futures

On February 25, 2013, CME Group convers the existing CBOT Denatured Fuel Ethanol Forward Month Swap to a future contract. In addition, the converted Ethanol Forward Month Futures are listed for electronic trading on CME Globex and could be eligible for block trading on ClearPort. These contracts are listed with, and subject to, the rules and regulations of CBOT. CME Code FZE Description Denatured Fuel Ethanol Forward Month Futures

For contract specifications, click here.

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datawatch February 2013 Platts to Change Basis for US Ethylene and Propylene Assessments
Effective April 1, 2013, Platts is proposing to change the basis for the US ethylene and propylene assessments. It will reflect pipeline delivery scheduling as the primary delivery method of the US olefins spot market. It propose to change from a 3-to-30 day timing window basis to a current delivery month and a next delivery month, three calendar days ahead of the end of the month. Comments can be sent to kevin_allen@platts.com, with a copy to pricegroup@platts.com.

Fossil Fuel Markets

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datawatch February 2013 BM&FBOVESPA Launches Derivatives for Sugar/Ethanol

On January 28, 2013, MB&FBOVESPA launched new commodity derivatives for the sugar/ethanol sector. They are the cash-settled crystal sugar futures contract and the anhydrous fuel ethanol futures contract. The cash-settled crystal sugar futures contract is quoted in Brazilian Reals under ticker symbol ACF, as of the April 2013 contract month. The contract is approved for trading from 9am to 2pm (Sao Paulo time). After-hours trading is from 2.35pm to 6pm. The contract size is 508 50-net kilogram bags. On January 29, 2013, call and put options on the cash-settled crystal sugar futures contract began trading, and reflected the same specifications as the futures contract. Prices reflect the product delivered at the Sao Paolo port of Santos, for domestic consumption and for export, and will be settled based on the Santos (SP) BM&FBOVESPA Crystal Sugar Price Index. The anhydrous fuel ethanol futures contract is being traded under ticker symbol ETN, as of the May 2013 contract month, with physical delivery. Trading is authorized from 9am to 3.20pm Sao Paulo time, and from 4.05pm to 6pm is after-hours trading. The contract price reflects prices from the Paulinia region. The size of the contract is 30 cubic meters (30,000 liters) and each futures contract is quoted in Brazilian Reals. Market participants now have the ability to execute hedge and arbitrage strategies between these new contracts in local currency and on a single electronic trading platform.

Agriculture, Forestry and Metal Markets

suppliers and Chinese steelmakers. Published quarterly on a dollar per dry metric ton unit basis, the lump premium would represent commonly traded brands such as Pilbara Blend and Newman lump. Variations from company to company will depend on brand, volumes and the negotiated package. The lump premium would be published in a range, and would appear in Platts SBB Steel Markets Daily, Platts Metals Alert and the Platts SBB Price Analyzer. The proposed lump premium would replace SBB Hamersley Pilbara Bld Lump 63.5% Fe Jap Aus Exp FOB W Aus port (SB01111) assessment in Platts SBB Steel Price analyzer.

NCDEX Launches New Gold Futures

Effective January 14, 2013, the National Commodity and Derivatives Exchange Limited (NCDEX) introduced futures contracts in Gold 100 grams (GOLDIND100). In the months of January, February, March, April and May of 2013, Gold 100 grams futures contracts are available for trading with modified contract specifications. COMTRACK will be exclusively used to settle all Gold 100 grams futures contracts expiring in January 2013 and thereafter.
For contract specification click here.

CME Lists Platinum Options and Palladium Options

Effective February 24, 2013, NYMEX adds Platinum Option (PO) and Palladium Option (PAO) on CME Globex trading platform for the following trade date, pending CFTC review. The trading venues are NYMEX trading floor and CME ClearPort. These contacts are listed with, and subject to, the rules and regulations of NYMEX. CME Code PO PAO Description NYMEX Platinum Options NYMEX Palladium Options

TOCOM Launches New Corn, Bean and Sugar Contracts

On January 18, 2013, the Tokyo Commodity Exchange (TOCOM) announced the launch of several agricultural and sugar products. The new products are set to begin trading on February 12, 2013 and feature corn, soybean, azuki (red bean) and raw sugar contracts. Contract specifications will primarily match those of the Tokyo Grain Exchange: Commodity Soybean Azuki (Red Bean) Corn Raw Sugar Description GMO, GMO mixed and GMO non-segregated No. 2 or better yellow soybeans produced in the USA. Grading standards No. 2 azuki (red bean) produced in Hokkaido, Japan. No. 3 yellow corn produced in the USA. Raw centrifugal cane sugar of a polarization of 96 degrees produced outside of Japan.

ICE Launches Iron Ore Contracts

On January 28, 2013, ICE announced the launch of two iron ore contracts on Ice Futures Europe, which began trading on February 11, 2013. All ICE contracts are cleared at ICE Clear Europe. The new contracts are: ICE Code IOC IOS Description Iron Ore 62% Fe (TSI), CFR Tianjin Future (The Steel Index) Iron Ore 62% Fe (Platts IODEX) vs Iron Ore 62% Fe (TSI), CFR Tianjin Future (Platts/TSI)

For product specifications click here

Platts to Publish Iron Ore Lump Contract Price Premiums

On March 1, 2013, Platts is proposing to launch contract price lump premiums for Australian iron ore lump, agreed between

For IOC contract specifications click here For IOS contract specifications click here

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datawatch February 2013 Xetra Launched Four Precious Metals ETF

On January 24, 2013, Xetra listed four new exchange-traded equity index funds issued by UBS (Irl) ETF plc. The new UBS ETFs from the Structured Solutions Solactive index series enable investors to participate in the performance of international companies, which make their income from the exploration, extraction and/or refining of gold or copper. The new products are aimed primarily at private investors through the A class and at institutional investors through the I class. Description UBS (Irl) ETF plc - Solactive Global Pure Gold Miners (USD) A-dis UBS (Irl) ETF plc - Solactive Global Pure Gold Miners (USD) I-dis UBS (Irl) ETF plc - Solactive Global Copper Mining (USD) A-dis UBS (Irl) ETF plc - Solactive Global Copper Mining (USD) I-dis ISIN Code IE00B7KMNP07 IE00B7KMTJ66 IE00B7JM9X10 IE00B7JMFQ66

Agriculture, Forestry and Metal Markets

has not changed; the update is merely clarifying what has been longtime practice. Contract specifications for MW US Transaction Premium, MW US Transaction and MW US Net-cash Premium can be found here.

CME Delists International Skimmed Milk Powder Products

On January 14, 2013, CME delisted International Skimmed Milk Powder Futures and Options contracts. CME Code ISM Description International Skimmed Milk Powder

Argus Acquires Fertilizer and Chemical Consultancy

On January 14, 2013, Argus acquired Fertilizer and Chemical Consultancy (FCC), for which it already owned a 49 percent stak e in. FCC provides long-term outlooks and strategic consulting for fertilizer markets. The founders of FCC, Bernard Brentnall and Frances Wollmer, will join Argus as principals, bringing their extensive experience of fertilizer and fertilizer raw material markets.

Platts Updates US Aluminum Specifications

Effective January 18, 2013, Platts updated the methodology descriptions and specifications of its price assessments for US Aluminum. Normalization factors are more detailed and the benchmark US Transaction assessment has been dissected into individual components. The methodology and consistency of data

10

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datawatch February 2013 China Partners with AccuWeather for Worldwide Weather Distribution
On January 30, 2013, weather service products available from Beijing Huafeng Innovative Network Technology Co Ltd became available across AccuWeathers original device manufacturer partners. These manufacturers distribute across the Peoples Republic of China. This relationship came about due to a global cross-licensing agreement between the two. The agreement will supply AccuWeather with weather service products from Huafeng Innovative Network across all digital media. AccuWeather will provide Huafeng Innovative Network with its information for use within the PRC. This agreement applies to distribution on any device with an IP address. This arrangement will give device manufacturers and distributors a single, reliable source for weather information when dealing with the PRC. An example of data reported by AccuWeather is displayed in the graph below.

Environmental Markets and Weather Services BM&FBOVESPA and BNDES Develop Carbon Efficient Index
On January 7, 2013, BM&FBOVESPA and BNDES declared the new portfolio of the Carbon Efficient Index (ICO2), based on the end of trading on January 4, 2013 and valid from January 7, 2013 to May 3, 2013. The portfolio comprises 36 stocks from the IBrX50 Index in 35 companies. These companies have committed to being transparent in reporting their greenhouse gas emissions (GGEs). They are: COMPANIES ALL BR MALLS BANCO DO BRASIL CCR COSAN GOL JBS LOJAS RENNER MRV OI SOUZA CRUZ TIM e VALE ISIN Code AMBEV BRADESCO BRASKEM CEMIG ELETROPAULO ITASA KLABIN MARFRIG NATURA PDG REALTY SUZANO PAPEL BM&FBOVESPA BRADESPAR BRF FOODS CIELO FIBRIA ITA UNIBANCO LOJAS AMERICANAS MMX OGX PETROLEO SANDANDER BR TELEFNICA

GGEs (factors recalculated annually) and the free floats (assessed every four months) of the companies are taken into consideration in the weighting of shares in the ICO2 index. The Center for Sustainability Studies (GVces), of the Business Administration School of Fundao Getlio Vargas (FGV-EAESP), harmonizes all issued data for the current portfolio using the ICO2 guidelines; these guidelines require mandatory presentation of a companys GGE inventory. These emission inventories are published on a specific environment set up by BM&FBOVESPA on its Em Boa Companhia website.

Data Source: AccuWeather*

NASDAQ OMX Commodities Adds to Nordic and Carbon Product Offerings

On January 9, 2013, NASDAQ OMX Commodities announced that it will launch new products in Genium INET. Genium INET will be upgraded to version .0222 during the weekend of March 23-24, 2013. European Union Aviation Allowances (EUAA) Futures will be listed on a quarterly expiry (March, June, September and December) for the two nearest years and December contract up to 2020. Contracts will have the same technical setup in regards to delivery and settlement procedures as the existing EUA/CER future contracts. The products are subject to successful testing which is on-going as of January 24, 2013.
*Graph created with ZEMA

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datawatch February 2013 CME Lists Standard and E-micro USD/Offshore RMB (CNH) Futures
On February 25, 2013, CME lists standard-size and E-micro USD/ Offshore RMB (CNH) futures for trading on CME Globex. These futures feature physical delivery of Chinese Renminbi in Hong Kong (CNH), priced in interbank terms of Chinese Renminbi per US dollar and associated with daily settlement variations banked in Chinese Renminbi offshore in Hong Kong. The new CME USD/ CNH futures will allow hedging and risk-management opportunities based on the offshore RMB curve, while multiple contract sizes provide increased trading flexibility as well as broader market participation. CME Code CNH MNH Description Standard-Size USD/Offshore RMB (CNH) Futures contracts E-micro Size USD/Offshore RMB (CNH) Futures contracts Tracks Index ISE Gemstone Index ISE Mining Service Index

FX, Interest Rates, Credit and Equity Indexes

4:10pm the electronic call for calculation of the settlement price will take place. Extended trading will be from 4:50pm to 6:00pm, with the price of the final transaction in this session being the closing reference price. The size of the contract will be 100,000 points or BRL100,000, using the effective annual interest rate to three decimal places as a reference. The reference rate for the futures contract will be backed by federal securities via the Special System for Settlement and Custody (SELIC). This is managed by the Central Bank of Brazil who publishes the rate on SISBACEN, its information system, after it calculates it.

Exchange Traded Bonds and Sukuk Launched on Bursa Malaysia

Danalnfra Nasional Berhad (Danalnfra) launched new Exchange Traded Bonds and Sukuk (ETBS) on Bursa Malaysia Berhad, marking a historic milestone for the Malaysian capital market. ETBS are listed fixed income securities traded on the stock exchange that offer preset, non-taxable returns, and are paid out over fixed intervals. A minimum of RM 1000 capital is needed by investors to begin investing. Danalnfra was established to undertake funding for infrastructure projects assigned by the Government in Malaysia for the benefit of the general public. One such project is the My Rapid Transit project (MRT). The ETBS will be used to partly fund the MRT project, providing a costeffective method to raise capital, as well as providing investors the opportunity to share in the growth and wealth of the nation.

This contract is listed with, and subject to, the rules and regulations of CME.

CME Lists Standard and E-micro Indian Rupee/USD Futures

On January 28, 2013, CME added cash-settled Standard and E-micro Indian Rupee/US Dollar futures. Since 2008, the Indian rupee (INR) market has grown 42 percent while trading at $ 25.5 billion per day. Rising demand in international business transactions and increasing central bank activity have created a need for capital-efficient risk management tools on this emerging currency. These two futures are offered in two contract sizes to expand flexibility and opportunities: Standard-sized futures - 5,000,000 INR E-micro sized futures - 1,000,000 INR CME Code SIR MIR Description Standard-Size Indian Rupee/U.S. Dollar Future E-micro Size Indian Rupee/U.S. Dollar Future

ComStage ETF S&P SMIT 40 launched on Xetra

On January 29, 2013, ComStage ETF issued a new equity index fund on Xetra for trading. Investors for the first time are able to participate in the performance of the S&P SMIT 40 TRN EUR Index. The S&P SMIT 40 Net Total Return EUR Index tracks the performance of ten stock corporations in the emerging markets South Korea, Mexico, Indonesia and Turkey. All four countries are given equal weighting in the index, with the weighting of the individual stock corporations within a country determined by freefloat market capitalization and trading volumes. The index is a net return index, which means dividend payments after tax deduction are taken into account. Description ComStage ETF S&P SMIT 40 Index TRN ISIN Code LU0860821874

The trading venues are CME Globex and CME ClearPort.

New Interest Rate Derivatives Launched by BM&FBOVESPA

Effective March 1, 2013, BM&FBOVESPA launches a new futures contract and new European-style call and put options on interest rates. Both new derivatives will be referenced to the average of one-day repurchase agreements, backed by federal securities. However unlike the options for which the underlying asset will be an index specially created for this purpose, the underlying asset for the futures contract will be the average rate itself. The futures contract is authorized to trade between 9:00am and 4:00pm, with the April 2013 contract as the front month. At

EGX and NYSE Liffe to List EGX 30 Index Futures

On January 14, 2013, the Egyptian Exchange (EGX) and NYSE Liffe - the European derivatives business of NYSE Euronext - signed a license agreement in London to enable the listing of an EGX Index futures contract. This would offer investors in the Egyptian capital market a useful hedging tool, while increasing volumes on the underlying constituents of EGX 30 index, thus increasing liquidity

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datawatch February 2013

on the EGX cash market. His Excellency Mr. Osama Saleh, Minister of Investment in Egypt, witnessed the signing ceremony and highlighted the importance of the agreements timing as the Egyptian economy continues its recovery and reinforces its exposure to international markets.

FX, Interest Rates, Credit and Equity Indexes

business allows them to bring new ETFs and similar products to market by offering capital, business development and marketing support, positioning them as a respected partner of ETF and exchange traded notes issuers, industry service providers and new entrants to the ETF space. Currently, ISE has a portfolio of over 30 proprietary indexes with 19 exchange-traded products based on them.

Five db X-trackers on CSI300 Sector Index Family Launched on Xetra

On January 21, 2013, db X-trackers issued five new equity index ETFs for trades in Deutsche Brses XTF segment. The five new db X-trackers ETFs from the CSI300 sector index series enable investors to participate for the first time in the performance of Chinese A-class shares in the following sectors: banking, energy, healthcare, real estate and consumer discretionary. Description db X-trackers CSI300 Banks Index ETF db X-trackers CSI300 Consumer Discretionary Index ETF db X-trackers CSI300 Energy Index ETF db X-trackers CSI300 Health Care Index ETF db X-trackers CSI300 Real Estate Index ETF ISIN Code LU0781021877 LU0781021950 LU0781022172 LU0781022339 LU0781022099

Clearstream on the Offshore RMB Market

On January 14, 2013, Clearstream acted as the exclusive international central securities depository (ICSD) for the primary distribution of two new RMB bonds: 1) China Construction Bank issued a RMB 1.25 billion certificate of deposit 2) Bank of China Hong Kong issued a RMB 650 million bond These bonds represented Clearstreams first in 2013 but it follows a trend in 2012 which saw the ICSD support the issuance of more than RMB 84 billion of international bonds. In 2012, Clearstream facilitated the primary distribution of a RMB 1 billion bond issued by CCBL Funding PLC with the China Construction Bank as guarantor. As the process of raising RMB funds outside of China is expected to grow to meet increasing demand, Clearstream is working with major partners to facilitate this process.

The CSI300 sector index series only contains companies in the CSI300 index. The CSI300 index comprises A-class equities of the 300 Chinese companies with the highest market capitalization and greatest liquidity traded on the Shanghai Stock Exchange or the Shenzhen Stock Exchange. Currently, the product offering in Deutsche Brses XTF segment comprises a total of 1,014 exchange-listed index funds while the average monthly trading volume stands at approximately 11 billion.

Clearstream and Belfius Expand Global Services to OTC Derivatives

On January 17, 2013, Clearstream and Belfius announced a partnership to exclusively develop a new collateral management activity for bilateral trades, focusing on OTC derivatives aimed primarily at corporate and medium-sized banks. The services will leverage Belfius specialist experience and will be white-labeled by Clearstream and offered to its clients. The new services are expected to be launched in summer 2013 and will be compliant with the best practices and standards in the European Market Infrastructure Regulation (EMIR). The deal is the latest in a number of partnerships created by Clearstream as it extends the reach and capabilities of its Global Liquidity Hub.

HKEx Introduces New ETF Options

Effective January 21, 2013, Hong Kong Exchanges and Clearing Limited (HKEx) introduced options on two A-share ETFs: the CSOP FTSE China A50 (CSOP A50) ETF and ChinaAMC CSI 300 Index (CAM CSI300) ETF. The options size for both is 200 and they will be traded in Hong Kong dollars. As of January 21, 2013, the expiry months available for trading are January, February, March, June, September and December of this year. Full specifications can be found here.

ISE Introduces ISE ETF Ventures

On January 30, 2013, the International Securities Exchange (ISE) introduced ISE ETF Ventures, a new product development group. Its dedicated team focuses on expanding capabilities and partnership opportunities in the ETF space. Already experts in index development, ISEs expansion in the ETF

Markit Launches Markit CMBX Series 6

On January 25, 2013, global financial information services company, Markit, launched the Markit CMBX Series 6 product. CMBX Series 6 is a family of synthetic indices based on a static portfolio of US commercial mortgage-backed securities (CMBS). In particular CMBX Series 6 consists of the following six subindices each of which references 25 bonds from a portfolio of 25 CMBS issued in 2012:

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Markit Index Markit CMBX. NA.AAA.6 Markit CMBX. NA.AS.6 Markit CMBX. NA.AA.6 Markit CMBX. NA.A.6 # Markit CMBX. NA.BBB-.6 Markit CMBX. NA.BB.6 Underlying Security Last cashflow AAA bonds Junior AAA bonds AA bonds A bonds BBB- bonds BB bonds

FX, Interest Rates, Credit and Equity Indexes

tory approval from the Minister of Economy. The exchange will continue to calculate and publish the index in the future for benchmarking purposes in the evaluation of investment trusts or commodity funds.

The index composition is rules-based and selection criterion includes deal size, pricing date and relevant rating and credit enhancement of the bonds included in each deal.

Eurex Repo Offers Funding Opportunities for GC Pooling and Euro Repo Markets
On January 17, 2013, Eurex Repo announced its plans to extend the maximum term of tradable securities for the Eurex Repo markets which include GC Pooling and Euro Repo. As of January 21, the maximum duration for transaction was increased from one to two years. This change provides Eurex Repo market participants with the ability to make use of the Long Term Refinancing Operations (LTRO) of the European Central Bank (ECB). As of January 30, the ECB allowed banks to prematurely return LTRO liquidity which they borrowed from December 2011 and February 2012 with a maturity of three years.

CME Delists 2 -Year Treasury Note vs.2-Year Deliverable Interest Rate Swap
On January 21, 2013, CME delisted the 2-Year Treasury Note vs. 2-Year Deliverable Interest Rate Swap intercommodity spread from CME Globex. These contracts are listed with, and subject to, the rules and regulations of NYMEX. CME Code Description ZT 2-Year Treasury Note vs. 2-Year Deliverable Interest Rate Swap

Tokyo Commodity Exchange Delists Nikkei-TOCOM Index Future

On January 18, 2013, the Tokyo Commodity Exchange announced the delisting of the Nikkei TOCOM Commodity Index Futures contract (TOCOM NEXT). The move will be completed upon regula-

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datawatch February 2013 Department of Energys ESnet Launches New Map Tool
On January 16, 2013, the Department of Energy publicized a highlevel map of its Energy Sciences Network (ESnet). The new map is published on the ESnet website and depicts color-coded data transfer rates along with summaries on data traffic at given points in the network. Launched into production in November 2012, the network connects 40 research sites around the US with 100 gigabit-persecond connectivity. This makes it the fastest coast-to-coast science network in the world. ESnets directors decided to develop the map to give users better statistics on whats happening within their high-speed backbone. The map is expected to be the first of several others for ESnet.

Other Matters

CBOE Launches Customized Option Pricing through MDX

On January 14, 2013, the Chicago Board Options Exchange Inc. (CBOE) launched the CBOE Customized Option Pricing Service (COPS) through Market Data Express LLC (MDX). COPS combines the market making expertise of CBOEs liquidity providing community with the access of MDX to deliver market consensus valuations. This service meets the requirements of institutional investors that, by law, need to correctly price the value of custom options held in their portfolio on a daily basis and produce reports for their customers. CBOE market makers help create indicative values for up to 3,000 options series on 300 underlying options classes every day and it is their robust pricing models that COPS will rely on for pricing options. Market makers will submit their valuations to MDX after the market close and COPS subscribers will receive custom data based on those averages every day. Wolverine Trading, Spot Trading and Sumo Capital will participate in the COPS service initially and will price: All open FLEX options positions OTC options Theoretical option prices

EIA Expands API Options with State Energy Data

On January 29, 2013, the US Energy Information Administration (EIA) expanded its API to include data from its State Energy Data Systems (SEDS). The SEDS library adds 1.4 million data points, including figures on energy production, consumption, price and expenditure information. State data available in SEDS includes: Energy production crude oil, natural gas, coal and ethanol Energy consumption by source and sector (residential, industrial, commercial and transportation) Energy costs and expenditures by source and sector GDP and population Along with this data, EIA plans to launch a wider range of datasets through the API which will include the agencys weekly, monthly and annual petroleum and natural gas data. The following graph shows EIA monthly crude oil production for North Dakota, California and Texas:

NYSE Expands Asian Offerings with NYSE Philippines Inc.

On January 14, 2013, NYSE Euronext announced the completion of its resource transfer from Fixasia Technologies Inc. to a newly created subsidiary, NYSE Philippines Inc. Based out of Manila, the new subsidiary is being launched to expand NYSEs offerings in the Asian market. The new business is expected to operate as a regional technology hub with over 100 employees to start. As NYSE Technologies largest service desk, the new subsidiary will handle infrastructure and client systems monitoring, connectivity and operations support, as well as development and quality assurance responsibilities.

Clearstream and 360T To Launch Pioneering Triparty Repo Service

On January 9, 2013, Clearstream and 360T Trading Networks AG announced their cooperation on the delivery of a streamlined triparty repo solution through 360Ts front office facilities and Clearstreams integrated collateral management platform and securities lending product portfolio. The service reaches out to a wide customer base including corporate clients, hedge funds and asset managers. It seamlessly integrates Clearstreams leading collateral management solutions with the important trading functionalities of 360T. The cooperation will further enrich Clearstreams Global Liquidity Hub through the Liquidity Hub Collect stream. Carlo Klzer, CEO at 360T, underlined: With the seamless integration of the 360T trading platform and the Global Liquidity Hub, we will enable our clients to benefit from a single trading venue for electronic trading. Moreover, the whole product life cycle

Data Source EIA*

*Graph created with ZEMA

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datawatch February 2013

from price discovery to execution and settlement will be faster, more reliable and fully STP-supported. Both companies expect the service to go live in the first quarter of 2013. Steffen Khler, Chief Operating Officer of EEX, said: With this initiative we react to the increasing requests from American participants. To raise our distribution in the North American area, we are working on connecting more independent software providers (ISVs) to our trading infrastructure. Currently, 98% of EEXs trading participants are based in Europe. Eurex has 80 exchange members out of 430 based in the US.

Other Matters
quarter to discuss partnership plans, developments, commercial opportunities in collateral management, and to share individual market news.

New Data Centre Opened by HKEx in Tseung Kwan O

On January 31, 2013, Honk Kong Exchanges and Clearing (HKEx) opened its Next Generation Data Center in Tseung Kwan O Industrial Estate. The new center is the linchpin of HKEx Orion Technology Initiatives, a $3 billion transformative program of technology initiatives designed to elevate Honk Kongs position as an international financial hub. Uniting the primary data centers for all of HKExs markets and clearing house systems under one roof, the five-storey facility will enable HKEx to support the growth and development of its markets. Hosting Services will be offered at the center, allowing participants to co-locate their systems next to HKExs core platforms to provide access with the lowest possible latency. The data center can also support up to 1,200 racks with a total power load of 8MW, making it the highest capacity service offered by any exchange in Asia-Pacific. It also meets rigorous international environmental standards and is among the first data centers in the region to meet Tier-4 standards.

Liquidity Alliance Launched to Address Global Collateral Crunch

On January 16, 2013, a group of five Central Securities Depositories (CSDs) from around the world formed a liquidity alliance designed to help solve the global collateral shortage prompted by the 2007 financial crisis and subsequent regulatory changes. Australias ASX, Brazils Cetip, Germanys Clearstream, Spains Iberclear and South Africas Strate announced they will cooperate together to help address the global collateral crunch. The financial crisis prompted regulators to make risk avoidance their top priority, bringing in a raft of new legislation, including Dodd-Frank, Emir, and CRD IV. According to April 2012 estimates by the Basel Committee on Banking Supervision, banks in Europe alone are facing an aggregate shortfall of stable funding of EUR 2.78 trillion in fulfilling the additional liquidity requirements of Basel III. The five members - who hope to bring in more CSDs in the future - plan to tackle this issue by exchanging information, identifying common needs and extending global collateral solutions while encouraging research and development. They will meet each

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February 2013

Monthly analytics for Power, Natural Gas, Crude Oil and Environmental markets. Graphs prepared with ZEMA.
Actual Weather (AccuWeather) Actual Weather (AccuWeather)

Chicago experienced some very cold weather in February dropping below -15 degrees Celsius on multiple occasions. New York experienced some temperature drops; however, most of the time, the temperature ranged between -7 and +7 throughout January and February. Further south, Raleigh saw its temperature drop below zero on three occasions this year and Sacramento has had fairly consistent temperatures hovering around +10 degrees Celsius.

North American Natural Gas Spot Prices (ICE) North American Natural Gas Spot Prices (ICE) Eastern electricity prices climbed higher in December and January Natural gas prices in North America have exhibited volatility in February following a rather unpredictable weather pattern. This has been a continuing trend from the last month. With temperatures dropping substantially, prices in the Northeast climbed higher in response, accompanied by congested pipeline conditions. In particular, Transcontinental Pipelines Zone 6 delivery point, which serves New York City, saw prices soar well above $30 per MMBtu on several occasions throughout the month.

Henry Hub Natural Gas Forward Curve (ICE) North American Electricity Day-Ahead Prices (ICE)

With unchanged fundamentals on the long term outlook, ICE Henry Hub natural gas futures remained at approximately the same level with only a 2% change in price compared to last month.

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February 2013

Monthly analytics for Power, Natural Gas, Crude Oil and Environmental markets. Graphs prepared with ZEMA.
North American Electricity Day-Ahead Prices (ICE)

ISO-NE and NYISO power prices rose sharply with dropping temperature and increase in natural gas prices. Milder temperatures in California and Southeast kept prices at a moderate level.

Crude Oil Brent vs. WTI (NYMEX) - Prompt-Month Contract Prompt month contract for Brent Crude Oil reached just above 115 USD/Bbl in February, the highest since April 2012. Texas light sweet also rose to 96 USD/Bbl from 93 USD/Bbl in January, yielding robust demand growth for oil. The transatlantic (Brent vs. WTI) spread in February increased by almost 4 USD/Bbl to 19 USD/Bbl from January. Chinese data showed increase of more than 7% in oil imports to the worlds second-largest oil consumer, which mainly impacted Brent prices. Saudi Arabias announcement to increase second quarter output and uncertainty surrounding Italian election results weighed in on the euro and may have suppressed the optimism in global demand growth.

Crude Oil Brent vs. WTI (NYMEX)- Forward Curve Crude oil futures prices maintained their momentum as NYMEX WTI stood just above $95 USD/Bbl and Brent prices traded at $116 USD/Bbl in February. Data from the US Commodity Futures Trading Commission suggested hedge funds and other large speculators raised their bets on higher NYMEX crude oil futures and options for the eighth straight week, the longest stretch since 2006 and the highest position since September. In February, the Brent-WTI spread has widened since Enterprise Product Partners LP said at the start of the month that capacity will be limited until late 2013 on its Seaway pipeline to the Gulf Coast from Cushing, Oklahoma - the delivery point for New York crude. Both prices are expected to slide down smoothly in a longer term.

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datawatch February 2013 Carbon Market Data Releases New Phase III Data on the EU Emissions Trading Scheme
On February 20, 2013, Carbon Market Data announced the release of new Phase III data regarding the EU emissions trading scheme. The third phase of the European cap-and-trade program started on January 1, 2013 and will end in 2020. New sectors have been included into the scheme, in particular the aluminum and chemical industries, as well as the carbon capture and storage activities. Moreover, two new greenhouse gases have been added to the scope of the EU ETS, i.e. nitrous oxide (N2O) and perfluorocarbons (PFCs). New Phase III data can be consulted online in the World ETS Database. Access and registration to the database are free. More info at http://www.carbonmarketdata.com

News from Data Vendors

volume. Volume in 15-Minute contracts amounted to 83,942 MWh. In January, they represented 6.2 % of the volume traded on the German Intraday market. *** EPEX SPOT SE operates the power spot markets for France, Germany, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European electricity consumption. EPEX SPOT SE is a European company (Societas Europaea) based in Paris with a branch in Leipzig. 339 TWh have been traded in 2012 on EPEX SPOTs power markets. Clearing and settlement of all EPEX SPOT transactions are provided by European Commodity Clearing AG (ECC), the clearing house based in Leipzig.

EPEX SPOT SE: NorthWestern European Price Coupling in good progress

18 February 2013 The Partners involved in the NWE Price Coupling are completely dedicated to the NWE project, a project that will facilitate every further step to be taken towards the panEuropean Market Coupling. The NWE objective is to significantly increase the social welfare by optimizing the congestion management of more than twenty borders across thirteen countries. By implementing for the first time the Price Coupling of Regions (PCR), NWE will not only expand the scale of todays coupling solutions in Central Western Europe (CWE), the Nordic countries and between these two regions, but will also include Great Britain, the Baltic countries and the SwePol link between Sweden and Poland. NWE will provide a new price coupling system, focusing on robustness and ensuring compatibility with the rest of Europe. Since the South Western European region (Portugal and Spain) is already well advanced, it is decided to have common testing with SWE making sure that price coupling of these countries will be feasible soon after NWE goes live. NWE Price Coupling is carried by a strong partnership between 13 Transmission System Operators (TSO) and 4 Power Exchanges. It is pioneering the pan-European Market Coupling of Day-Ahead power markets. NWE will cover 75% of the European Electricity market. We are currently implementing and testing locally the necessary IT changes, procedures and contracts. Testing of all systems, including integration testing, shall start in April. The project is targeted to go live in November 2013 subject to successful testing. Price coupling projects like NWE have a considerable impact on infrastructure; hence this solution has to be extremely robust. We, the partners of the NWE Price Coupling project, are therefore committed to enhance these quality standards to the NWE Price Coupling. We are engaged to deliver this achievement on a European scale. Stakeholders will be regularly informed about the on-going process through the ACER Stakeholders Electricity Advisory Group (ASEAG) and Stakeholder meetings, the next scheduled for June 14 in London. Beginning of March all published material

EPEX SPOT SE: Power Trading Results in January 2013

Paris, 4 February 2013, In January 2013, a total volume of 28.2 TWh was traded on EPEX SPOTs Day-Ahead and Intraday markets (January 2012: 29.6 TWh). Day-Ahead markets In January 2013, power trading on the Day-Ahead auctions on EPEX SPOT accounted for a total of 26,571,892 MWh (January 2012: 27,805,694 MWh) and can be broken down as follows:

* Peak excl. weekend Prices within the French and the German market, both coupled with Belgium and the Netherlands within the market coupling initiative in Central Western Europe (CWE), converged 38 % of the time. Intraday markets On the EPEX SPOT Intraday markets , a total volume of 1,621,153 MWh was traded in January 2013 (January 2012: 1,811,025 MWh):

* without Austrian market, which was launched in October 2012 In January, cross-border trades represented 12.4 % of the total Intraday

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datawatch February 2013

from the project, including a monthly report to the regulators, will be found on CASCs and on the NWE Power Exchanges websites via the respective links as published at the bottom. The national TSOs, Power Exchanges and regulators are ultimately responsible for information and transparency to stakeholders and market participants in their own region. For more information, please contact the co-chairs of the NWE project: Bente Hagem, Executive Vice President of Statnett Tel. +47 91354720 Jean-Franois Conil-Lacoste, Chairman of the Management Board of EPEX SPOT Tel. +33 173039630 www.casc.eu www.apxendex.com www.belpex.be www.epexspot.com www.nordpoolspot.com Natural Gas Forwards Power Forwards Natural Gas Volatilities

News from Data Vendors

Power Implied Volatilities Natural Gas / Power Correlations

To learn more about OTCGHs data products or to request a 30 day trial contact Jeff Shipp at shipp.j@eoxlive.com.

New Data Reports for ZEMA

At ZE, we are continuously growing our data coverage. Our highly flexible data parsers can collect information in any electronic format, from any source and at a frequency. Since the January 2013 edition of DataWatch, we have added several new data reports to ZEMA: Data Source CME D-Cypha Trade EIA EIA EIA EIA Heren ICE ICE ICE IEA IIR JODI NEISO NYSE Liffe OPIS OPIS OPIS OPIS OPIS Reuters Vicorus Commodity Brokers VV Commodities Report Block Trades Private Trade And Messages EPM Average Cost Of Coal For Electricity Generation By State EPM Average Cost Of Natural Gas For Electricity Generation By State EPM Consumption Of Natural Gas For Electricity Generation By State By Sector EPM Consumption Of Coal For Electricity Generation By State By Sector GLM EOD Futures Packages EOD Canada Futures End of Day Europe Futures and Options MODS Field By Field Supply Refinery Turnaround HTTP Oil World ISOExpress Fuel Mix CommodityFuturesProcessor Crude Postings Canadian Rack 9am Rack Standard Spot Replacement Index Biodiesel Rack Precious Metal Forwards Market Report Region Global Australasia North America North America North America North America Global Europe North America Europe North America North America Global North America Global North America North America North America North America North America Global Global

OTC Global Holdings Launches Power Implied Volatilities

OTC Global Holdings LP (OTCGH), the leading independent interdealer broker in over-the-counter commodities, formally announced the availability of its latest data product, Power Implied Volatilities powered by EOXLive. Drawing upon the deep liquidity of OTCGHs breadth of brokerages, the product is derived from the companys well-known EOXLive broking/trading platform which combines the convenience of electronic trading with voice brokings unique ability to provide market color and create bespoke transactions. It offers comprehensive power options data covering historical volatility, straddles and skew for 12 locations across PJM, MISO, NEISO, NYISO, CAISO and WECC going out 24 months. To learn more about OTCGHs data products or to request a 30 day trial contact Jeff Shipp at shipp.j@eoxlive.com.

OTC Global Holdings Completes Gas and Power Data Suite

OTC Global Holdings LP (OTCGH) completed their gas and power data suite, powered by EOXLive. Built from the deep liquidity of the OTCGH family of brokerages, this product suite provides comprehensive gas and power data and offers much needed swaps and options price discovery to front offices as well as reliability to middle and back offices. Products in the suite include:

Market Prices

Global

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In Depth

HOW RENEWABLES SHAPE THE FUTURE

Cyriel de Jong, Hans van Dijken and Emiliyan Enev, KYOS Energy Consulting

In 2012, the German capacity of solar energy passed the 32 GW mark. The impact on the market prices is noticeable: summer prices go down, peak prices go down especially midday, and gas fired power generation plants have difficulty making money. In this article, we take a detailed look at how this is further going to shape future price levels. Whereas the market trades baseload and peakload products, we shift attention to the more detailed hourly price differences, reflected in hourly price forward curves (HPFCs). For example, we demonstrate that during day-time, an increase in the share of renewable production by 10 percentage points reduces power prices by 6.6%. During the night, the impact of renewables is even larger.

The impact of renewable production The fundamentals

Solar and wind are the primary renewable energy sources for Germany at the moment. They have zero or even negative marginal costs: whatever the power price level, the owners earn a guaranteed income (the feed-in tariff) and will always produce. This means that the flexibility to the system has to come from other elsewhere, the conventional sources. That is mostly coal- and gas fired production. The easiest way to understand the impact of renewables on price levels, is to study a supply-demand curve. The supply curve, or merit order, is constructed by ranking the production plants from lowest to highest marginal costs. With increasing capacities of renewables, and depending on the weather conditions, the supply curves move to the right. This pushes the conventional sources out of the production and thereby lowers price levels. For sure, market participants are factoring the renewable energy boom into their price levels. The forward spread between peakload and baseload used to be around 43% prior to 2009/2010, but has been around 20-25% in the past three years. This is quite a dramatic development for owners of gas-fired generation. And even for owners of pump hydro, who were expecting to benefit from unpredictable patterns in supply, times are difficult. Time-series graphs like the one shown in the previous chapter indicate that solar and wind generation have reduced power prices, and peak prices in particular. The market trades baseload and peakload, but what is more difficult to assess, is what future hourly price patterns will look like. In order to incorporate the growing share of renewables in the hourly shaping of the forward curve, we need more precise methods than a graphical analysis. In fact, it is necessary to filter out the impact of other developments. For example, over the same time period of the German renewable boom, the economy has slowed down. And over the same time period, fuel prices have swung up and down. For this reason, a simple time-series analysis on the absolute price levels will not be very accurate. It is advisable to zoom in on small time intervals instead, such that the true renewable effect can be filtered out from other general trends. In statistical terms: it is best to take first differences in order to make the time-series stationary. We apply this logic to hourly price data for each hour h, consisting of: Ph German hourly power prices, in /MWh Sh German solar production, in GWh

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datawatch February 2013

In Depth

HOW RENEWABLES SHAPE THE FUTURE

Wh Th German wind production, in GWh German total production, in GWh We perform this regression separately for the first 8 hours of the day, and the remaining 16 hours. This is because the impact of renewables appeared to be stronger during the night than day, most likely because then the demand is lower. Because the expected impact of all explanatory variables is negative, the regression contains minus signs.

The power prices are from the daily auction at Epex, as quoted on EEX. The production data are from a couple of sources. With these variables, it is possible to define various equations that capture a possible relationship between hourly power prices and renewable production. After some testing and common sense choices, a well-fitting equation is the following: h=1h242h3h+h We take 24 hourly time-steps, so look at the difference between hour 1 on day t to hour 1 on day t+1, from hour 2 on day t to hour 2 on day t+1, etc. This makes the analysis insensitive for the general intra-day (hourly) differences. The 24-hourly differences are denoted by the sign . As primary dependent variable (left-hand side), the equation contains the change in the natural logarithm of the hourly power price. This is denoted by ph. This price transformation corresponds with a merit order that has an exponential shape. It also gave better results than a regression on absolute price differences. Note that prices below 1 are set to 1, because otherwise the natural logarithm cannot be taken. As primary explanatory variables (right-hand side), the equation contains the change in the share of renewables in the total production mix (sh and wh). This normalizes the data and gave somewhat better results than taking the absolute production levels. An important control variable is the log price level from the previous day. This control variable captures the meanreverting behavior of power prices: on a single day a price can be extraordinarily high, but generally trends to more moderate levels afterwards. It is part of almost any spot price analysis. As control variables, the equation furthermore contains dummies for Saturdays and Sundays (including public holidays). This is mainly because power prices tend to be lower on those days than on working days. For simplicity, the dummies are not shown in the equation. 22

All parameters of the equation are highly significantly different from zero, with t-values all above 20 (note 2 indicates significance at 95% level). The high R-squared of 20-23 % is another indicator that the data fits quite well to the specification. The parameters can be interpreted as follows: During the night, an increase in the share of wind production by 10 percentage points (e.g. from 15 to 25%), reduces power prices by 16.6% (e.g. from 30.00 to 25.40 /MWh). During day-time and evening, an increase in the share of either wind or solar production by 10 percentage points reduces power prices by 6.4-6.8% (e.g. from 60.00 to 56.18 /MWh). This information in itself is very interesting and can help traders to make better short-term price forecasts. In addition, we will take a more long-term view and assess how this price-renewable dependency affects the hourly price forward curve, HPFC.

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datawatch February 2013

In Depth

HOW RENEWABLES SHAPE THE FUTURE

Shaping the future
Forward curve building means that the available forward market prices are transformed into a continuous and accurate curve. For power, the end result typically has hourly granularity. The hourly shapes reflect likely differences between individual hourly power prices in the future. For example, between 0:00 and 4:00 in the night, prices tend to be lower than between 04:00 and 08:00, even though both blocks are offpeak. At the same time, the curves have to stay arbitrage-free relative to the current market quotes: the average of the HPFC over forward delivery periods are equal to the prices of the forward contracts. If renewable generation capacities were constant, past historical price patterns would be representative for the future. However, the share of renewables is growing, so typical hourly patterns in 2009 are already quite useless for predicting shapes in 2013. Using 2012 historical data would be better, but would not give us enough data and still be quite wrong for later years. As a solution, it is possible to generate new histories of historical price data, consistent with future levels of renewables. Market watchers expect renewable capacities in 2015 to be around twice as high as in 2010. It is possible to combine this information with the regression results: we create a hypothetical hourly spot price that would have been observed in 2010 if the renewable capacities of 2015 had already been in place. The new hypothetical prices are more spiky and can be used to shape the 2015 forward prices. Based on data from 19 July 2010, when there was quite a lot of solar production midday, the adjustment is shown in the next chart. On a day with relatively a lot of solar production, prices during midday (11:00-17:00) are pushed down most. This leads to different patterns in the forward curve. In particular, it is realistic to assume that the general trend of renewable generation growth is incorporated in the peak and baseload forward prices in the market. A forward curve that is arbitrage-free will therefore especially exhibit lower prices during midday, but higher prices in the morning hours (8:00-11:00) and especially later in the afternoon (17:00-20:00) when demand is high and solar production low. Because wind is more evenly distributed over the day, more wind capacity has a relatively smaller influence on the hourly price forward curve. How this eventually works out on the hourly price forward curve is visible in the next graph, showing an average working-day shape for 2018.

Conclusion
In this paper we presented a hybrid approach for shaping forward curves: our methodology combines fundamental information (about renewable production) with statistical analysis. The numbers shown have been estimated with around three years of German market data. We also tested with different time windows, but parameters were remarkably stable. Still, it is difficult to say whether the price response to renewables will generally decrease or increase. This will largely depend on policy decisions that try to keep enough flexibility in the power system, in addition to an increase in (nonflexible) renewable capacity.

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HOW RENEWABLES SHAPE THE FUTURE

Hourly price forward curves form the basis of pricing any non-standard profile. This can be a customer profile or e.g. the optimal production of a power station. With a consistent implementation of renewables in the forward curve building process, companies can price contracts and assets more accurately. Of course, inclusion of renewables in the forward curve building process is not the only important aspect. However, it is an important one, and we hope this paper is a practical contribution of how this can be achieved.

About KYOS KYOS offers specialized advise on trading and risk management in energy markets. Our expert team has years of experience in quantitative modeling. The KyCurve software as used in this article is a quant solution for generating price forward curves in a variety of commodity markets. Our clients operate the software in-house or subscribe to the curves we produce on a daily basis via www.pricecurves.com (also available via ZE).

About ZE PowerGroup Inc ZE is an experienced software and strategic consulting firm that combines energy industry expertise with advanced software development capability. The company possesses deep industry knowledge and comprehensive operational experience. ZE is the developer of ZEMA Suite, a sophisticated Enterprise Data Management and Analysis solution built to meet the specific challenges of energy and commodity market participants. About ZEMA ZEMA is an enterprise data management suite designed for collecting data and performing complex analysis. ZEMA replaces fragmented data collection and analysis processes with a sophisticated, unified and automated data management system. Each ZEMA component can perform as an independent product; this means greater flexibility when integrating ZEMA into your organization. ZEMA is consistently ranked #1 for preferred system, #1 for ease of system integration, and #1 for customer service. ZEMA is easy to use and backed by our support team around the clock. Disclaimer ZE DataWatch is a report, comprised of data updates and expectations for energy and commodity markets and powered by ZEMA. The information contained in the ZE DataWatch is for information purposes only. Although ZE PowerGroup believes the information in this report to be correct and attempts to keep the information current, ZE PowerGroup does not warrant the accuracy or completeness of any information. 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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