Market highlight: Basis liquidity capped by Interconnector capacity

Trade on the Belgian Zeebrugge - British NBP Day-ahead basis will drop when the premium that the Belgian hub holds to the British market rises above 2.0p/th, as flows down the bi-directional Interconnector pipeline hit nameplate capacity, according to ICIS data.

During September, a steep fall in the British NBP Day-ahead contract caused the contract to decouple from mainland European prices, including the Belgian Zeebrugge Day-ahead.

ICIS analysis demonstrates that although the NBP Day-ahead was trading at a significant discount to its Zeebrugge counterpart, there was not, as may have been expected, a surge in interest from shippers taking advantage of the lower priced contract. This is because British export capacity had reached its limit.

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