Another week of high volumes traded with short-term delivery prices rising

July 27, 2014 by Rahul Rana

CaliforniaCarbon.info, July 27, 2014: For a second week in a row the Intercontinental Exchange (ICE) saw high volumes of California Carbon Allowances (CCAs) being traded. A total of 6.9 million CCAs were traded, most of which were future delivery contracts as the weekly market continues to be dominated by spread trades.

Most of the 6.9 million CCAs traded were V2017 contracts (5.4 million); half of which was traded for delivery this month (2.2 million on Wednesday and 500,000 on Thursday), which could indicate entities are trying to drop spot volume in order to take up more of the vintage in the coming auction.

The other half of 5.4 million traded was spread in the same manner over the same two days with 2.2 million of the V2014 to be delivered in December next year and 500,000 to be delivered in December this year.

On Thursday, 500,000 V2014 contracts were traded for delivery this month and another 500,000 V2014 were contracted for December 2014 delivery.

The prices of short-term delivery contracts of the V2014 on ICE increased in the past week. The July 14 contract gained 6 cents and the benchmark Dec 14 contract, along with other deliveries in the final quarter this year gained 7 cents. Deliveries for V2014 early in 2015 also saw increases in price (Jan & Feb by $0.06 cents; March & April $0.05; May & June $0.04; July & August $0.02). Prices remained the same for the Dec 15 delivery. Future deliveries past this point also saw prices tumbling, V2014 Dec 16 dropped 5 cents and V2014 Dec 17 deliveries dropped 8 cents in the past week.

V2015 Dec 14 contract gained 3 cents while the Dec 15 delivery saw no change and Dec 16 and Dec 17 deliveries saw 2 cents and 5 cents shaved off from the previous week’s price.

V2017 Dec 14 delivery also gained 3 cents this week, while the price of future deliveries dived with theDec 15 delivery losing 11 cents, the Dec 16 losing 15 cents and the Dec 17 losing 8 cents.

For further information regarding this article, please write to contact@californiacarbon.info.

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