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CEE/SEE: Regional prompt prices spike, pushing up curves

10 Apr 2012 19:51:23 | edem

Regional electricity traders' attention was focussed on the prompt on Tuesday, with prices spiking as a result of a forecasted prolonged cold snap. Liquidity was patchy after the Easter long weekend.

Hungarian traders said the effects of the bullish prompt were felt as far out as the annual contracts which gained on average €0.50/MWh since the last assessed session on Thursday. As a result the premium of the Hungarian front year Baseload to its German counterpart now stands at €7.00/MWh. Traders insist the spread may widen by at least another €3.00/MWh, bringing the difference to €10.00/MWh as seen before the 2008 recession. The Hungarian Calendar Year 2013 Baseload product was assessed at €58.45/MWh on Tuesday.

Romanian and Serbian curve prices were also dragged up, seemingly by similar fundamentals.

The Polish curve moved higher in line with rising emissions prices. The front year Baseload contract closed Zlotych (Zl) 0.25/MWh higher at Zl211.35/MWh.

Traders said a bullish outlook reflected a consensus view that an EU meeting on Tuesday to discuss the set aside of emissions allowances would result in reduced supply.

Polish traders agreed the Cal '13 Baseload contract remained overpriced, and would fall in coming months. One trader said it could fall to Zl205.00/MWh.

"If you look at the outturn of the Day ahead market and CO2 prices, there is a lot more room for Cal '13 to fall further. But it hasn't happened because the main ­incumbents have been purchasing the ­contract," the trader said.

The Czech curve finished the session virtually flat day on day, with the front year Baseload product losing €0.05/MWh in line with lower gas prices. Traders noted that the Czech Cal '13 Baseload discount to the equivalent German product increased by €0.10/MWh and the discount for May '12 Baseload widened by €0.25/MWh.

Closer in, The Polish prompt price spiked Zl16.00/MWh to Zl177.00/MWh. Traders were at a loss to explain such a large increase in one day, aside from colder forecasted weather, as there were no unplanned domestic outages and CHP plants are still in operation. Sparse hydro generation in Hungary and the wider east European region coupled with a reduction in cross-border flows from Slovakia and Austria boosted the Hungarian Wednesday Baseload price by €17.25/MWh and Wednesday Peaks by €23.50/MWh.

A trader active on the Romanian market said Hungary was relying on Romania for imports as its usual supplies from Slovakia and Austria had been curtailed.

"Romania reacts to the imbalances in Hungary and the Balkans and we are likely to see these prices for as long as there is little rain in the region," he added.

Serbian weather services forecasted a rise in hydro levels for power generation through 17 April. However, the report also expected Danube levels to remain flat over the coming days. The Czech Week ahead product closed €4.00/MWh higher at €42.25/MWh in line with the regional trend, yet the spot shed €1.00/MWh to finish the session at €40.00/MWh, €11.75/MWh below the German spot. KB/AS

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