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Market optimism keeps CCA prices high

April 17, 2017 by Ronjoy Bezbarua

CaliforniaCarbon.info, April 17, 2017: CCA prices continued to maintain the high levels attained after the landmark judgement by the appellate court on the 6th of April. ICE prices maintained a weekly average front price of USD 14.16 for the current vintage and reached a high of USD 14.22 on the 11th of April before stabilizing and settling to a respectable weekly close of USD 14.15. With the court case being a major obstacle earlier, the prices are expected to continue this trend.

With 3,476,000 tons traded, the volumes dipped by 29% from the week before. Trading remained concentrated primarily around the current vintage-V2017 with a share of over 90% of the volumes traded, leaving aside transactions of 35,000 and 300,000 tons for V2016 and V2018 respectively. The volumes for V2018 which had a share of 22% for the week below dipped by 72% from 1,075,000 and consisted of 8.6% of the volumes for the week.

In terms of delivery, the contracts were spread between the current front, June 2017 and current benchmark with a 17.5%, 7.6% and 73.4% share of the total volume traded. Trading on the June 2017 front in particular commenced for the first time with 265,000 tons traded.

Open interest creation improved noticeably when compared the week before with a net change of 1,098,000 contracts (a 1.8% increase). Significant contributors to this aspect were the current front April 2017 and current benchmark December 2017 with 510,000 and 348,000 contracts created respectively forming 78% of the total change. 190,000 contracts were created for the newly traded June 2017 front.

The current benchmark December 17, following the same trend as the front prices, settled at USD 14.32, a gain of USD 0.02, with a weekly average of USD 14.33. As we move on to the Ontario market, it can be seen that the USD prices settled to the highest point it has seen till now at 14.40 aided by a favourable first auction as well as favourable exchange rates of the CAD to the USD. Weekly volumes traded for the Ontario Carbon Allowances (OCAs) stood at 40,000 tons. The newly declared prices of the May 2017, June 2017 and September 2017 remained the same as the December prices

Ronjoy Bezbarua – ronjoy.bezbarua@californiacarbon.info

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