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CCA prices dip ahead of auction weeks as emissions report is released

November 13, 2017 by Abhilasha Fullonton

CaliforniaCarbon.info, November 13, 2017:

CCA saw significant price changes over the week with an a 12 cent drop early in the week after the Air Resources Board’s data showed emissions were lower than expected. Aside from that the price changes were comparatively tamer as the week came to an end.

The prices of CCAs lowered coinciding with the emissions data release. The current front (V17 Nov17) and benchmark (V17 Dec17), closed the week at USD 15.13 and USD 15.15, respectively. This represents 20-cent decrease from last week. Front-to-benchmark spreads widened by a cent on Friday last week causing the year-ahead implied funding rate (annualized) to reach 2.74%.

Weekly volumes traded decreased by -7.85% to 15,587,000 tons by the end of the week. The V2017 was the major contributor to trading with 15,081,000 tons exchanged and accounted for 78.19% of the total trade for the week.  The V2018 traded 200,000 tons with a 12.83% contribution. Volumes traded for the remaining vintages were – V2015 (a contribution of 0.32%), V2016 (0.32%), V2019 (5.45%) and V2020 (2.89%). Delivery-wise, trading was mainly concentrated on four months – Dec17 (9,135,000 tons), Jun18 (2,502,000), Sep 18 (1,800,000) and Dec18 (1,850,000) accounting for 58.61%, 16.05%, 11.55% and 11.87% of the total. Minor volumes of 25,000 tons were seen for Nov 17 and Mar 18 with a contribution of 0.16%.

Open interest creation was significant, having an overall positive net change of 1,794,000 contracts. New contracts were seen on four deliveries– May 18 (250,000 contracts added), Jun 18 (1,500,000), Dec 18 (1,750,000) with a decrease of -1,706,000 contracts for Dec 17. All vintages saw positive net changes.

After a stale few months in the market the Ontario carbon market saw 3,000,000 tons traded for Feb 18 at the beginning of the week with the OI increasing by the same amount. The OCA front and the benchmark prices now stand at CAD 19.16 and CAD 19.21, respectively.

Abhilasha Fullonton (abhilasha.fullonton@californiacarbon.info)

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