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Market breaks silence in build up to auction results

March 1, 2017 by Billy Hamshaw

(CaliforniaCarbon.info, March 1, 2017) Breaking the trend of what is normally a calm period pre-auction results, California Carbon Allowances (CCAs) took a plunge yesterday afternoon as the market reacted to a leaked press release from Senator Kevin de León’s office. Although only online for a short-period of time, the statement announced another under-subscribed auction, spooking market participants and triggering sell-off on both Dec 17 and Mar 17 contracts.

The current front delivery, Mar 17, cleared the exchange at $13.52 at yesterday’s close whilst broker spot prices were down by almost -0.7%, closing at $13.47 – 9 cents slighter than the previous day. In total 795,000 allowances were traded, 550,000 of which were concentrated on the Front delivery whilst 200,000 transacted on the year’s benchmark. 45,000 contracts also traded hands on Dec 18.

With no legitimate reasoning to suggest that the Senate President’s office had knowledge of the auction outcome before today’s results are published, the press release was likely a miss fired statement, prepared in anticipation.

More light will likely be shed on this story in the following days. In the meantime, CC.info will be providing live coverage of the auction results as they break today.

Billy Hamshaw (billy@californiacarbon.info)

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