Vattenfall stops making on the Nordic power EPAD contracts, leaving customers for short supply, leaving for supply-building for the uk

Vattenfall stops making on the Nordic power EPAD contracts, leaving customers for short supply, leav ...

- Swedish utility Vattenfall gave a decision on its side on Friday to replace the Swedish and Finnish Swedish distributor for two contracts on Nasdaq Industrial Products, citing liquidity and volatility issues.

Exchanges often agree to market maker deals with larger trading entities such as Vattenfall that do want to create liquidity for specific contracts.

The Nordic power market has 15 bidding zones, each for a common benchmark price, yet in each area pay individual price.

The Nordic EPAD futures contracts are financial instruments used to compare these differences between the individual zones and the system price.

Nasdaq Commodities said that Vattenfall was the sole market marker for EPADs for all of Sweden's four and Finland's single bidder zone.

"But we do have price providers helping us set equitable and orderly price rates in the respective contract," a spokesperson said.

The spokesperson said that most EPADs have low liquidity, especially the five-year cost zones in Norway and Sweden's two northern price areas.

I told Reuters that Vattenfall could not be the sole owner of liquidity, and is demanding other traders contribute, the head of Nordic Trading at Vattenfall told Reuters.

The company lacks the necessary tight bid/offer spreads needed to maintain market marking due to the structural and increasingly problematic large liquidity imbalances in certain price areas, which also resulted in high volatility, said he.

"We don't anticipate a significant change in our trading activities," Cheval said.

Vattenfall continues to market for North Korean base load power future contracts on Nasdaq Commodities.

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