Price hovers around the reserve price as market approaches auction

February 13, 2017 by chandan.kumar

This week’s CCA traded volume was up by over 100% on the previous, a total of 5,045,000 contracts passed hands by the weeks close on Friday. The current vintage, V2017, accounted for all-bar-one of the trades – an increase in liquidity of over three times compares to the previous weeks V2017 trade total. A single transaction of 55,000 took place for V2019.

In terms of delivery, contracts were mainly spread over the front and benchmark at 50% and 38% respectively.The current vintage also saw some trading on the March 2017 delivery as well as further down the forward curve on the December 2018 delivery.

The open interest creation improved over the previous week as 2,262,000 new contracts were introduced,concentrating around the current vintage. A total of 2,092,000 new contracts of V2017 were introduced last week.

The front price closed at $13.53 on Friday, $0.01 below the previous Friday’s closing of $13.54, leading to a $0.04 spread between the auction reserve price and front month contract value as market participants gear up to submit bids in this month’s auction.  The end of week comparison for the December benchmark witnessed a $0.02 fall, as it settled at $13.74. This was accompanied by $0.03-$0.04 fall further down the forward curve.

During the second week of trading for Ontario’s cap-and-trade market, Ontario Carbon Allowances (OCAs) witnessed two transactions for the current year’s benchmark. 55,000 and 25,000 OCAs traded at US$ 13.79 (CAD 18.09) and US$ 13.79 (CAD 18.12) respectively. The market closed at US$ 13.93 on Friday, US$ 0.07 above the previous week’s close of US$ 13.86 and US$0.19 above the current vintage equivalent in California.

Chandan Kumar (chandan@californiacarbon.info)

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