CaliforniaCarbon.Info 22nd Oct, 2018: California Carbon Allowance (CCA) prices continue to be stable with very little movement on the forward curve. Both trades and open interest relatively slowed down, registering minimal activity in the market. At the beginning of the week, prices for most deliveries remained the same with a few exceptions (mostly latter deliveries) that dropped a cent on the forward curve. The following day there was slight movement with front (V18 Dec18) and V18 Nov18 gaining 3-cents on the curve while the rest of the deliveries gained 2-cents. Mid-day prices stayed the same with no activity under Volume and OI. The last day of the week CCA market saw slight intraday volatility, with deliveries picking up anywhere from 1-cent to 6-cents on the curve. As of Friday (10/19) front is trading at USD 15.46 and benchmark (V18 Dec18) is trading at USD 15.54. See CCA tracker for daily price updates:

Volume: Volumes decreased significant in the last week as trades totaled to 4.1 million tons a drop of over 63% over a week. There have been some movement in trades, as we approach the annual and triennial surrender deadline. We see entities making strategic transactions over to the next compliance period, as expected. On Friday, 330,000 tons was transacted from V17 Dec18 to V20 Dec18 as the latter delivery was trading at a cent higher. 700,000 tons were traded from V21 Dec18 to V21 Dec19 as Dec19 was trading at 3-cents higher than Dec18. There were other minor trades that followed similar movement of aforementioned trades. Dec19 trades totaled to 1.3 million tons while Dec18 saw relatively higher trades at around 2.1 million tons. Trades under current front picked up only towards the end of the week totaling at 630,000 tons. Vintage-wise V2021 almost matched trades with V2018. Trades amounted to 1,577,000 tons for V2018 and 1,525,000 tons for V2021.

Open Interest: Market saw significant additions and closures of open interest. Around 1.1 million OI contracts settled under Dec18 while Oct18 and Dec19 saw the bulk of added OI contracts at 1.3 million. Vintage-wise around 146,000 contracts were settled under V2017 and V2018 combined while V2021 saw 575,000 new OI contracts.

Analyst contact: Abhilasha Fullonton (abhilasha.fullonton@californiacarbon.info)