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CEE/SEE: far curves fall further, Polish prompt bullish

03 May 2012 20:43:46 | edem

The bears maintained a firm grip on regional curves on Thursday, amid weaker oil and emissions prices.

Trading activity was muted in Poland, because of a public holiday. Only Polish Week 20, the front month and front year Baseload contracts traded. Peakload products were assessed flat day on day, as no factors were present to result in changes to the prices of these contracts.

Activity on the Hungarian market was once again more concentrated on the prompt than on the curve. The Hungarian front year ticked down by €0.15/MWh day on day after a late trade, closing at €57.35/MWh.

The Czech far curve initially fell, driven down by softer fuels prices, but then staged a modest recovery. The front-year Baseload contract bottomed at €48.30/MWh before rebounding to end the session just €0.05/MWh lower than yesterday's close.

One Czech trader said he was puzzled by the correction, but noted it had no effect closer in on the curve, with the front month losing €0.50/MWh day on day. He retained a bearish outlook for the near curve, on the basis that there are no significant production outages scheduled in the next two months.

The Hungarian June '12 Baseload moved €0.15/MWh lower session on session to close at €50.75/MWh.

One Hungarian trader said the product was holding steady because the level of cross-border capacity available in the last week of June remained uncertain, in light of planned maintenance on the Austrian border.

"Even if May turns out at German levels, June can still trade at a premium to the German equivalent because of the maintenance," he said.

The Polish prompt was assessed higher by ICIS, in line with market consensus of a probable correction next week after low consumption during the public holidays.

But beyond next week, Polish traders said the direction of the near curve was uncertain. "I'm not sure which direction the curve will take this month as it depends when the warmer weather and the use of air-conditioning starts," one trader said.

The Hungarian spot lost ground on Thursday, reflecting warmer weather, healthy cross-border capacity and balanced supply from the Balkans. One Hungarian participant said that if stable conditions continued, he didn't expect a large premium to Germany during this month's maintenance at the Hungarian-Slovak interconnector. Serbian Day-ahead traded at €47.25/MWh on Thursday, the same level as the Hungarian equivalent. Traders agreed that the supply in the Balkan region as a whole was balanced at the moment with Serbian state-owned utility EPS continuing to sell to Hungary.

Romanian trading screens did not register any trading activity. Day-ahead Baseload on local exchange OPCOM outturned at New Lei 203.41/MWh. Traders expected exchange levels to increase, as the 1.4GW Cernavoda nuclear power plant will close for maintenance on Friday.

"However, I don't expect any spikes because there will be anther power plant coming online to compensate for the shortage," one Romanian source said. Higher levels of solar generation weighed on spot and prompt prices in the Czech Republic. KB/IP

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