Ice lowers TTF front-month gas margin rate by 23pc

The Intercontinental Exchange (Ice) has dropped its margin requirements for trading the Dutch TTF front-month contract by nearly 23pc, effective from 26 January's gas day.

The margin requirement fell to €10.722/MWh, down from the €13.864/MWh which was applicable from 27 November and the lowest since June last year (see shorter-term graph). Margins for contracts with delivery dates further into this year also dropped by 8-19pc, but the margin rate for the December contract edged up, and all contracts' margins increased for delivery periods from July 2025 onwards.

This comes after a steep fall in TTF prices, with Argus assessing the front-month contract at €27.94/MWh on 26 January compared with €43.65/MWh on 27 November, a drop of nearly 36pc. But while the margin is lower in absolute terms, it is now higher as a percentage of Argus' front-month assessment, at 38.4pc compared with 31.8pc for the 27 November margin.

TTF prices have fallen in recent weeks, despite a cold start to the year across Europe and small disruptions to Europe's LNG supplies owing to the situation in the Red Sea. Withdrawals from EU storage sites tripled to 5.9 TWh/d in the first half of January over the cold period from just 1.8 TWh/d in the second half of December. But EU stocks remain high for this time of year, while February's temperatures are broadly forecast to be mild. German injections could even begin as early as February, German gas storage operators' association INES has said.

The Ice TTF front-month margin peaked at €80.973/MWh on 9-23 March 2022, but has been on a downward trajectory since then. It has remained volatile however, moving broadly in tandem with gas prices. While the new margin from 26 January is the lowest in around six months, it is still much higher than the margin of around €4/MWh which applied in early 2021 (see longer-term graph).

By Brendan A'Hearn