Increasingly globalized natural gas trade and its pricing system

（I）Liquidity improved across all major natural gas markets in 2023. Natural gas hubs enable market participants to trade natural gas in open, competitive markets. Natural gas trading can occur either over-the-counter (OTC) or on exchanges, covering products ranging from short-term contracts to derivatives for delivery several years into the future. These derivatives allow market participants to implement sophisticated risk management strategies. Liquidity at natural gas hubs ensures that supply and demand are matched efficiently—both in terms of time and cost—without triggering significant price volatility. Greater liquidity enhances resource allocation efficiency, strengthens supply security, and facilitates price discovery. One key metric used to assess liquidity is the turnover ratio—the number of times a unit of natural gas changes hands before final delivery to the end consumer. A turnover ratio above 10 typically indicates strong market liquidity. In 2022, liquidity declined across all major global natural gas hubs. Sharp increases in natural gas prices, coupled with heightened volatility, raised margin requirements for counterparties, thereby increasing the cost of holding positions and straining liquidity—especially among market participants with more limited financial capacity. In 2023, falling natural gas prices and reduced volatility eased margin calls, leading to a rebound in trading volumes and improved market liquidity. In the United States, trading volume at the Henry Hub declined by 5% in 2022—the lowest level since 2015—while the turnover ratio fell by 40%, reaching its lowest point since at least 2012. Throughout 2023, lower natural gas prices reduced trading costs. Although trading volume remained 3% below the 2017–2021 average, it rebounded by 13%; the turnover ratio rose by 11% to 44—still 11% below the five-year (2017–2021) average. In the EU and the UK, natural gas trading volume plummeted nearly 20% in 2022 but surged nearly 30% in 2023, reaching an all-time high. This recovery was almost entirely driven by the Dutch Title Transfer Facility (TTF), whose trading volume grew by over 40% year-on-year. The TTF’s share of total European natural gas trade rose from nearly 75% in 2022 to just over 80% in 2023. The turnover ratio for EU and UK natural gas markets rose 45% year-on-year, reaching an estimated 17—the highest level on record. According to industry media reports from February 2024, Intercontinental Exchange (ICE) reported that TTF natural gas futures traded 59.2 million contracts in 2023—a roughly 50% increase year-on-year—propelling ICE’s global natural gas business revenue to a record 44% year-on-year growth. As international firms increasingly trade TTF natural gas futures, related contracts have become the global benchmark for natural gas pricing—attaining a status comparable to Brent crude oil in the oil market. In Asia, trading volume for ICE’s Japan-Korea Index (JKM) derivatives fell by 40% in 2022.

Futures contract codes supported by IBKR

CUS (Composite Price); NYM (New York); LAX (Los Angeles); CHI (Chicago); BOS (Boston); WDC (Washington, D.C.); SFR (San Francisco); MIA (Miami); LAV (Las Vegas); SDG (San Diego); HGX (Phoenix); DEN (Denver) II. Interest Rate Futures 1. U.S. Dollar and Hong Kong Dollar Interest Rate Futures: ・Interbank lending rates: ZQ (USD 4,167), SOFR1 (USD 4,167), SOFR3 (USD 2,500), TBF3 (USD 2,500) ・Hong Kong Interbank Offered Rate (HIBOR): HB3 (HKD 5 million multiplier) ・Federal Reserve Rate Event Contracts: FF ・Treasury Yield Futures: 2YY (USD 1,000), 5YY (USD 1,000), 10Y (USD 1,000), 30Y (USD 1,000) ・U.S. Treasury Futures: ・2-Year: ZT (USD 2,000); ・3-Year: Z3N (USD 2,000); ・5-Year: ZF (USD 1,000); ・10-Year: ZN (USD 1,000); ・Beyond 10-Year: TN (USD 1,000), MTN (USD 100); ・20-Year: TWE (USD 1,000); ・30-Year: ZB (USD 1,000); ・Beyond 30-Year: UB (USD 1,000), MWN (USD 100). ・Fixed-to-Floating Interest Rate Swap Index Futures [Multiplier: USD 1,000]: ・1-Year vs. SOFR: YIA; 2-Year vs. SOFR: YIT; 3-Year vs. SOFR: YIC; ・4-Year vs. SOFR: YID; 5-Year vs. SOFR: YIW; ・7-Year vs. SOFR: YIB; 10-Year vs. SOFR: YIY; ・30-Year Mortgage-Backed Securities (MBS) Futures [Multiplier: USD 1,000] (All are 30-year MBS contracts differing only in coupon rate): ・2% (20U), 2.5% (25U), 3% (30U), 3.5% (35U), ・4% (40U), 4.5% (45U), 5% (50U), 5.5% (55U), ・6% (60U), 6.5% (65U) ・Investment-Grade Corporate Long-Term Bond Index: IBXXIBIG [USD 1,000]; IQB [USD 30] (Bloomberg Investment Grade Corporate Bond Index) ・High-Yield (Speculative-Grade) Corporate Long-Term Bond Index: IBXXIBHY [USD 1,000]; HYB [USD 150] (Bloomberg High-Liquidity High-Yield Index) ・Bloomberg U.S. Investment-Grade Corporate Bond Rate-Hedge Index Futures: DHB [USD 500] ・Bloomberg U.S. High-Yield Corporate Bond Rate-Hedge Index Futures: DHY [USD 750] ・Bloomberg Emerging Markets Sovereign USD Bond Index: FUEM [USD 200] ・iBOXX Emerging Markets Bond Index: IEMD [USD 100] ・ICE U.S. Conforming 30-Year Fixed-Rate Mortgage Rate Lock Weighted APR Index: LRC30APR [USD 5,000] (ICE US Conforming 30-Year Fixed Mortgage Rate Lock Weighted APR) ・ICE U.S. Jumbo 30-Year Fixed-Rate Mortgage Rate Lock Weighted APR Index: LRJ30APR [USD 5,000] (ICE US Jumbo 30-Year Fixed Mortgage Rate Lock Weighted APR)

ICE launches new LNG, freight and UK power derivatives

22 hours ago

ICE launched new JKM LNG options, freight futures, and UK electricity derivatives to help customers manage price risks in Asian gas, shipping, and power markets.

reuters

2026-09-28

ICE launches new LNG, freight and UK power derivatives

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