There were 7 contracts traded that were eligible to include in the index calculations this month, which was a step up from last month which had only 3 contracts.
The main index came down this month by 7.7% driven by a fall in both sub-indexes. The CFD index is still eye-wateringly high, even after it fell by a whopping 21%. The two CFDs that were traded were once again relatively short term (9 months each) commencing in October, which means they span a period of exceptionally high prices driven by the gas shortage.
The five FPPV contracts are an interesting bunch because the shortest term among them is 2.8 years, and the other four have terms from 3.5 to 5 years. Larger consumers have recently wanted to contact longer term so that the average price is minimised.
But this still locks in a relatively high price when one considers how the market could look by the end of 2022, assuming gas supplies are restored, new generation is about to come on line, with 55 MW of industrial demand gone from the market at Kawerau, not to mention 2024, when Tiwai will have it's "Clash moment" (So if you want me off your back, Well, come on and let me know, Should I stay or should I go?) and may exit in 2025.
There was some more good news in the last week as we saw NZ storage rise to be almost what it was at the same time last year. While this doesn't solve or fully offset the gas problem, it certainly takes the pressure off the market and will help to keep spot prices down.
Dowload the PDF below for a more indepth breakdown of Contract Indexes for June.