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CEE/SEE:Low balancing market pressures Polish curve

13 Mar 2012 20:27:55 | edem

Regional electricity prices failed to take a consistent direction on Tuesday with some curves continuing the bearish trend from Monday and others moving up.

The Polish market saw another burst of activity on Tuesday with monthly products trading as far ahead as August '12. The curve continued the bearish trend picked up on Monday. According to one Polish trader, this was caused by the low balancing market levels. "Until prices on the balancing market increase I don't see any bullishness on the curve," he added.

Another Polish participant noted that low emissions prices and higher temperatures were additionally pressuring the curve. "The only bullish signal may come from the planned outages in week 13 and week 14. (The) 858MW Belchatow (plant) will be out. If weather is warm, the cogeneration (CHP) plants will also stop. This means that the less-effective power plants will have to produce all the power, and this will increase the marginal production cost," he remarked.

Activity on the Czech market was assessed as "regular" as most participants were focused on the April '12 cross-border capacity auctions organised by the Central Allocations Office and published on Tuesday. "Prices outturned in line with the current spreads. There were no big surprises," one Czech trader said.

Hungarian curve prices defied a generally bearish trend, scooping up gains on the front quarter and its monthly component products.

Participants active on the market said the region's hydro generation levels were still below market expectations, boosting prices.

The biggest winners on Tuesday were May '12 Baseload, which was assessed €0.70/MWh above Monday's price and the front-quarter Baseload, which gained a similar amount on the previous session.

The May and June '12 Baseload products were assessed in line with gains on the Q2 Baseload contract which traded in four clips totalling 35MW.

April '12 Baseload last traded at €48.40/MWh, €0.40/MWh on the previous session. Participants said outturns in the April auctions were fractionally above the currently traded levels for the month. But they insisted that the values were being driven by strong fundamentals.

The remaining quarterly products with the exception of Q1 '13 also witnessed a burst of activity on Tuesday. Sources said a handful of larger companies were interested in snapping up the contracts for hedging purposes.

Romanian participants were anticipating robust prices even well into the next week as hydro generation in the country and the wider Balkan region were below the anticipated average. "We were expecting lower prices, but they are still above expectations. There is a lot of snow that hasn't fed into the rivers yet. Once this happens we may see a change," one Romanian trader said.

Serbian prompt and curve prices moved in lockstep with the Hungarian counterparts. Source active in the Balkans said countries such as Serbia and Slovenia were still grappling with hydro shortages.

The Czech spot moved down day on day on warm weather and high solar power production forecasts in Germany. IP/AS

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