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Hungarian Power Exchange to launch new physical futures products

Hungarian Power Exchange plans to set up and launch a natural gas exchange before the Jan 1, 2013. Tomorrow, it is launching new physical products, which will add to HUPX's current trade in day-ahead power.

The Hungarian Power Exchange (HUPX) will launch new physical futures products on Tuesday and expects their trading volume to amount to 3 to 5 TWh worth by the end of 2011, reported Reuters quoting the bourse's chief executive.

The 20 planned new products for future delivery of power, which include the front month, quarter and year delivery, add to HUPX's current trade in day-ahead power.

They also include Hungarian-German price spread futures and intra-day products, HUPX Chief Executive Zoltan Medveczki said in a telephone interview.

"We are working on getting the licenses for financial futures," he said. "It could start in half a year."

Hungary's HUPX and the Prague-based Power Exchange Central Europe are in competition to establish a foothold as a regional power-trading hub in a market where many traders question whether there is enough liquidity to support so many bourses.

Medveczki said the impending Hungarian, Czech and Slovak coupling of day-ahead power markets, which he expects to happen in the first half of 2012, could double traded volumes in Hungary to about 25,000-30,000 MWh per day. He added that HUPX would like to set up and launch a natural gas exchange before the Jan 1, 2013.

"We would like to achieve this in July 2012," he said, adding that HUPX incorporated the Central Eastern European Gas Exchange Corp. (CEEGEX) earlier this month.

CEEGEX will take over the current gas trading platform of the natural gas transmission company FGSZ. FGSZ will get a 20% stake in CEEGEX then, he said.