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Minimal activity as market stops for NACW

March 31, 2014 by CaliforniaCarbon.info

CaliforniaCarbon.info, Mar 31, 2014: There was minimal price movement and traded volume on the secondary market last week, as the California carbon market seemed to stop as stakeholders attended the Navigating the American Carbon World (NACW) summit from Mar 26 to 28.

There was minimal price change, with most instruments on the InterContinental Exchange (ICE) registering a one-cent rise early in the week before holding constant through the NACW period. The benchmark V2014 December 2014 delivery rose from $11.99 to $12.00 on Tuesday, the same day on which the forward benchmark (V2016 December 2015 delivery) rose from $12.23 to $12.24.

The broker-traded market took direction from developments on ICE, with both the OTC and Spot markets registering no price change for the second full week in succession. The V2014 OTC instrument is priced at $11.85, and the Spot at $11.61, using an aggregate of broker marks in this space. It is, however, impossible to know if any volume was exchanged at these levels.

It was in traded volumes where the drop-off in activity was most evident last week. A total of 36,000 CCAs were contracted on ICE, a mere 3.9% of the previous week’s 917,000. As such, the week contributed only 1.1% to the monthly total of 3,310,000 ICE-traded CCAs. It may be interesting to note that no more V2013s have been traded on ICE since the first week of March. This may suggest either a lack of available supply for the instrument in the forward contract market, or that compliance entities have well accounted for their surrender needs this year.

For more information on this article, please write to contact@californiacarbon.info.

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