NBP: very sharp increase
The provisional NBP price for September was €20.6/MWh ($7.9/MBtu), up nearly 18% in one month, but down 23% compared to the situation one year ago (€26.6/MWh). This change in the NBP is due to several factors. The change is primarily related to the significant downward correction in prices in June and July (€16/17/MWh) which usually results in reverse financial movements when there is excess. This was the case when the price fell slightly below the coal equilibrium price. The second increase factor is related to the 
fluctuation in the equilibrium price, which now stands at €19/MWh (+€1/MWh compared to June). This change is explained by the 11% increase in coal prices in €/t, due partly to the reversal of the coal market (+4.9% on the $/t price since mid-July) and in part due to the currency drop in the euro against the dollar (-5.3%). The third factor is the anticipated rise in the NBP to €25-26/MWh ($9.7/MBtu) in the winter, resulting in a gradual convergence of spot prices. The crisis between Russia and Ukraine is probably accelerating this rise. It also impacts volatility by amplifying daily variations.
European indexed price (spot 60%): increase in August
The European target price (LT 60%) was €24/MWh ($9.4/MBtu) in August, up more than 3% from July. This reflects the increase in spot prices (NBP +7.8%) but also the drop in the Euro
(-1.6%). This growing integration of spot prices in contracts remains favorable for buyers despite fluctuations in market prices: rising spot prices and lower prices in the oil market (€82/b in June, €76/b in August). On the basis of current trends, the LT 60% average price in 2015 would be approximately 12% below the LT price including only a 10% spot share.
The average import price in Germany was estimated at €22.5/MWh in June, halfway between the LT 60% price and the NBP price. This generally means a spot share greater than 60%.
American market (Henry Hub): stability
On the first days of September, the Henry Hub price remained stable compared to August, which was at $3.9/MBtu. In these two months, volatility was relatively limited, with variations of approximately +/- $0.15/MBtu. Markets anticipate equally stable prices for the next month (unless there are exceptional circumstances, like last winter). This vision is in line with recent EIA projections, which assume a 5% increase in production in 2014 against only 1.8% for consumption.
By Guy Maisonnier, Senior Economist – IFPEN