September 11, 2017 by Ronjoy Bezbarua
The bull run in the California carbon allowance (CCA) market came to a peak on Tuesday with the benchmark reaching USD15.53 only to kick the trend and lose USD0.22 over the next three days. The current front (V17 Sep17) and current benchmark (V17 Dec17) closed at USD 15.22 and USD 15.32 respectively, both closing USD 0.10 below the previous weekly closing prices.
Weekly traded volumes also declined in similar fashion with last week’s 3,154,000 tons falling at just 42.25% of the volume traded a week before. This activity was largely restricted to the vintages of 2017 and 2018 with the V2016 trading for the first time since July as 200,000 tons changed hands on Tuesday and Friday. The V2017 contributed to the majority of last week’s traded with 2,254,000 tons (71.46%) and the V2018 traded over 700,000 tons making up the remaining 22.19%. Delivery-wise, the trading was also constrained around just three deliveries: Sep17 (58.69%), Dec17 (19.12%) and Dec 18 (22.19%).
Open interest had an overall net positive change of 1,390,000 contracts wholly due to the Sep17 and the Dec17 deliveries which saw 1,339,000 and 301,000 contracts added, respectively. The Dec18 delivery, like the week before, saw contracts diluted to the tune of 250,000 on the V2018.
The Ontario carbon market which had its 3rd auction on the 6th last week saw a very significant decline in prices from mid-week by CAD 0.93 across all contracts. The OCA prices now stand at CAD 18.44 (USD 15.20) for the current front and CAD 18.57 (USD 15.31) for the current benchmark. Since the 22nd of June, no trade or any change in open interest was observed for this market including last week.
Ronjoy Bezbarua (email@example.com)