1. WCI Weekly Update
Week finishing May 27th 2016
Source: ICE Futures US
Source: ICE Futures US
Jan 1st Ontario Cap & Trade Market begins
May 30th
Day Event
Jul 1st
Ontario Cap and Trade Regulation
comes into effect
Aug 16th CA QB Joint Auction #8
US bank Holiday: Memorial day
12.25
12.50
12.75
13.00
May 20 May 23 May 24 May 25 May 26 May 27
$ / kt
V16 Dec-16 Auction Floor V16 SPOT
Last week, prices moved
down $0.03
V16 SPOT Prices closed slightly down,
trading between $12.34 and $12.39. The
volume traded increased to 4Mt all on
the V16. The total Open Interest
decreased 3.9Mt to 88.7Mt (mainly due
to end of May contract).
Auction undersubscribed
Current 11% Advanced 9%
As expected, the auction cleared at the
floor level $12.73. Only 42 entities
participated in the auction. Not all the
volume was sold.
Total Open Interest and Volume:
86,000
87,000
88,000
89,000
90,000
91,000
92,000
93,000
94,000
95,000
0
200
400
600
800
1,000
1,200
1,400
1,600
May20 May23 May24 May25 May26 May27
OI kt
Volume kt
VOL Dec-16 VOL Dec-17 VOL Dec-18
VOL Dec-19 VOL Dec-20 OI Total
Important Dates:
Our Forecast:
With the Quarterly auction now behind us, market participants will focus again on
market fundamentals. 69.5Mt allowances were not sold at this auction plus 4.8Mt at
the past auction and these allowances will not come back to the market until 2
consecutive auctions are fully subscribed. In terms of market prices, this should limit
upside to $12.73 as we have seen in the past two weeks. On the downside, prices seem
to have found support slightly above $12 so we expect prices to stay around the
current level.
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