WCI auction clears all 75.1m CO2 units at $12.73, bid coverage dips

Published 21:46 on November 24, 2015  /  Last updated at 09:21 on November 25, 2015  /  Americas, Canada, US  /  No Comments

All 75.1 million front-year WCI allowances on offer were sold at $12.73 (C$17.00) in last week’s joint California-Quebec quarterly auction.

All 75.1 million front-year WCI allowances on offer were sold at $12.73 (C$17.00) in last week’s joint California-Quebec quarterly auction.

The clearing price was 21 cents above the previous auction’s clearing price and in line with market participants’ expectations of next year’s floor price. It was also well above this year’s floor of $12.10.

The sale attracted bid coverage of 1.14, down on the previous auction’s bid-to-cover ratio of 1.28, according to data provided by the two governments. It recorded a mean price of $14.05.

Compliance buyers comprised 89.3% of the buyers, down on the 95.2% proportion for the August sale, indicating more participation by speculators.

In addition, all 10.4 million vintage 2018 on offer were sold at $12.65 (C$16.89).

These units attracted bid coverage of 1.32, down on the 1.78 ratio in the August sale. The ratio of compliance buyers was virtually unchanged at 94% versus 93.6% in August.

The oversupplied market enables compliance entities to comfortably meet their needs from auctions and tidying-up their positions using the ICE exchange, which typically sees a rise in turnover post-auction.

MODEST ISSUANCES

Meanwhile, California issued just 528,088 offsets over the past two weeks, data published on Tuesday showed, well down on the 3.5 million handed out over the previous two-week period and adding around 1.6% to the total number issued to date, which now stands at 34.4 million.

All the issued units over the past fortnight were early action credits, with all going to forestry projects with the exception of 9,619, which went to a livestock gas capture project, the data showed.

By Ben Garside – ben@carbon-pulse.com

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