The August 2025 forward market rebounded after a late July fall. VIC Cal-28 rose significantly while Q3-25 exhibited greater volatility. Options trading surged to 46% of total flow. Despite lower overall volumes, strategic opportunities emerged amid seasonal fluctuations and risk management shifts.
1.0 Highlights
In August 2025, the forward market experienced notable fluctuations, particularly in the Cal-26 and longer-dated instruments, with prices rebounding after a decline in late July. The Cal-28 in VIC saw significant gains, while TAS Cal-29 reached a premium price due to the MarinusLink project. The current quarter (Q3-25) demonstrated greater price volatility compared to outer quarters, with substantial declines in swap prices across regions, particularly in QLD, NSW, and VIC.
Trading activity was lower than previous months, with options gaining popularity, comprising 46% of the total flow. The busiest trading days were marked by spikes in spot prices, driven by option activity and fundamental factors such as weather and coal-unit outages. Despite a decrease in overall traded volume, the current quarter remained the most actively traded, with a focus on downside option risk management in NSW.
Gas forward prices in Victoria showed slight increases, while LGC certificates firmed in near-dated strips but softened in longer-dated ones.
Overall, the market dynamics indicated strategic trading opportunities, particularly in the context of seasonal volatility and shifting risk management preferences.
