CCA market trade 13 million ahead of auction results week

May 20, 2019 by Lonava Tahreen

California Carbon Allowances (CCAs) traded on the InterContinental Exchange(ICE) last week record a drop in volumes traded to 13.5 million tons after a stellar performance touching 45 million tons at the start of May. The first week also witnessed CCA Front prices hitting USD 18.31 stirred by speculation in the market. Auction results due on May 22, Wednesday would be interesting to note with other markets like Oregon moving a step closer to joining WCI as the cap and trade bill moved out of its originating committee last Friday.

Last week saw the annual benchmark (V19 Dec19) settling at USD 18.42 and a week-on-week rise in 2.4% in the front prices as of Friday.

Weekly traded volume

Last week 13,545,000 tons of CCAs traded in the California carbon market. Vintage wise, V19s added 10,030,000 tons contributing to 74.5% of the total traded while V18s added 3,000,000 tons. The remaining was made up of V20s contributing 2.62% and V22s with 1.11% respectively. Delivery wise, Dec19 delivery showed the most action adding 3.9 million tons alone to the total volume followed closely by Dec18 delivery with 1.2 million tons.

Price changes

Prices last week were much stable throughout the week starting Tuesday with a week on week gain of 5 cents as of Friday.

See our CCA tracker for a detailed look into CCA price trends:

The month of May showed the highest price fluctuations recorded this year and prices rose steadily in the week prior to auctions. Price rise could be seen starting mid-march, rising steep across April and finally attaining the highest premium from the floor prices at the start of May and gradually dropping back in the Auction week. This was a great variation seen since the floor change last December.

Price trends since Jan, 2019

Open Interest

A  total of 5,798,000 contracts were added to the open interest last week with an OI creation at 43% of the total volume. The total open contracts in the market stands at 187,763,00 which is higher by 3% since last Thursday. The Dec19 delivery still holds 48% of the all open contracts, currently the maximum in the CCA market.

Analyst Contact:

Lonava Tahreen(lonava.tahreen@californiacarbon.info)

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