Intercontinental Exchange Inc. (ICE) has reported fresh records for Asian natural gas futures in August, with Japan-Korea Marker (JKM) volumes surpassing 100,000 lots traded during the month.
ICE said JKM futures reached 106,529 lots traded, close to double August 2020 volumes. In addition, open interest ended the month at a record 114,531 lots.
The news comes as JKM prices remain at a premium over the European Title Transfer Facility (TTF) benchmark through the winter months. Asian liquefied natural gas (LNG) buyers have continued to stockpile supplies to avoid a repeat of the shortages experienced last winter. This is pulling cargoes away from Europe on the spot market, which is smaller than LNG volumes locked up under long-term contracts.
Still, August was busy for TTF futures. Volumes hit a new monthly record, with 860,000 trades executed, while 3,378 TTF options were traded during August, ICE said. The Dutch contract has hit record-high prices this month.
Meanwhile, open interest in TTF futures reached a high of 1.96 million lots in August, a 17% increase compared to the same period last year.
First line financial futures, a cash settled version of the TTF contract that trades in U.S. dollars/MMBtu, saw 49,492 lots traded. That is almost double July’s volumes and more than 75% higher than the aggregate 2020 volume, ICE said. Open interest in TTF first line volumes also climbed to a fresh high of 39,492 lots.
In the United States, the average daily volume (ADV) for benchmark Henry Hub options rose 19% from last year to 185,930 lots. Futures ADV was 385,952 lots, but ICE did not disclose last year’s figures.
ICE has reported record levels of TTF and JKM trading activity over the past several months as the global LNG market has heated up. Last month, it reported record levels of open interest for the Henry Hub contract. In June, ICE extended its forward curve for TTF by more than 18 months following requests from customers.
Separately, ICE has announced that it plans to launch a freight futures contract on Monday (Sept. 27) based on the Baltic Exchange’s liquid petroleum gas (LPG) assessment for the Houston to Chiba, Japan route. The United States is one of the world’s top producers and leading exporters of LPG, while Asia is one of the largest demand centers.
“Hedging the U.S. Gulf Coast to Japan export route has become ever more critical for our customers,” said ICE’s J.C. Kneale, vice president of North American Gas and Power. “ICE’s natural gas liquid markets are growing strongly, with open interest out to 2024. With the new LPG freight contract, we are helping our customers to further manage their entire portfolio of exposure for LPGs from production to shipping to consumption.”
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