WCI prices inched higher this week as RGGI prices stalled, though both markets were fairly illiquid as an Argus industry event kept many participants occupied.
Dec-15 CCAs closed Thursday 7 cents up wk/wk at $12.85, the highest close since Feb. 17 on turnover of 449,000 tonnes, while 2.5 million units changed hands in all contracts.
Trade in front-year RGGI permits were equally lacklustre, as the contract remained unchanged from last Friday at $6.70. Prices had earlier given up some of the 15% gains made in the wake of the September auction, but it appears as though the market has found an interim floor.
Volume was extremely thin, with 1.4 million allowances traded across all futures contracts.
“Things were moving so fast,” one broker said. “There was lots of buying, but it had to slow down. I think prices will come back.”
The market was taken by surprise late Thursday by New York State Governor Andrew Cuomo’s announcement that state officials would begin to explore ways to link RGGI to the California-led WCI.
There was no immediate price reaction to the prospect of a united market, with one trader commenting that the announcement represents the start of a long process.
California’s offset market was also extremely quiet, as ARB’s monthly update of early action offsets on Wednesday adding 113,670 units to the issuance queue, including forestry units set aside in a buffer pool.
Developers had until August to submit early action projects and ARB is racing to issue a backlog before an August 2016 deadline.
By Alessandro Vitelli – firstname.lastname@example.org