A theory that we have often quoted in this editorial is that of an expected shift to clearing in high volume months, as traders do not require a broker to find liquidity for them – it is there in the market already. June 2014 showed strong month on month volumes in all markets bar emissions, which supports this theory. Yet June is the second lowest volume month of the year by monthly contracts traded – comparatively, January to April saw higher volumes but lower cleared market share.
The cleared market represents both the exchange executed and broker cleared portions of volume. This distinction is important as the market structure of the groupings above varies even with similar cleared market shares. For example, while both the emissions and coal groupings have similar cleared market shares, the majority of emissions cleared volume is from exchange executions, while all of the Coal cleared volume is broker executed and then given up into clearing.
Strong growth in TTF (title transfer facility) Dutch natural gas volumes saw this market grow to a record level of the total NBP market in TWh terms in June 2014. Broker bilateral TTF volumes are larger than NBP volumes and if we look at the total broker market (both bilateral and cleared), it is larger than NBP. Internally we've been debating when the TTF market might catch up to NBP in total volume.