Voluntary trading activity strengthened on the week with market participants looking to fill end of year positions. Demand is focusing on charismatic pre-CDM RE VCU credits from South America, South East Asia and Africa currently $4/5.50 bid/offered. Standard Issued Indian RE pre-CDM VCUs continue to transact at $3.75–$4.50 levels while demand for Chinese VCUs has waned leading to pricing levels of $2.75-$3.25.
US CAR CRTs remain the most popular offset with the unveiling of ‘chairmans mark up’ of the Boxer – Kerry bill and a week of legislative meetings dominating the headlines. CRTs are a front runner for pre compliance early-action credits with projects holding at $7/8 bid/offered. Demand persists around 5 year forward strips of all approved protocols. US VCU Interest is increasing with participants advocating greater value for money. VCUs are currently $4/6 Bid/Offered.
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Posted on October 26, 2009 · in Market Summary
Signs of a bounce in VER demand are appearing with Chinese and Indian quality wind VCUs being sought by Buyers. Recent-vintage, pre-CDM VCUs Chinese credits are transacting at $2.75-$3.50, with Indian offsets commanding $1/$1.50 premiums. Competitive pricing has led to a temporary change of focus with participants looking to bolster portfolios at bargain levels, potentially calling the bottom of the recent dip in prices. Uncertainty over forestry projects is promoting a cautious approach from buyers on both sides of the Atlantic. ‘Exotic’ credit prices are diverging with some developers raising prices to $5.50 levels, citing high development costs for in demand smaller sized VCU projects.
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Posted on October 11, 2009 · in Market Summary
VER demand remains consistent following a week of industry conferences. Higher pricing and the lack of issuance of exotic credits are promoting interest in recent vintage Indian RE VCUs currently $3.50/$4.50 bid/offered. Exotic VCUs are transacting at $1/2 premiums but are suffering from uncertainty over delivery timelines, new methodology approval and final volume size.
Gold Standard demand is improving with small clips of issued credits €7.50/8 bid/offered.
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Posted on October 5, 2009 · in Market Summary
VER market activity continues to improve with demand growing for VCUs and Gold Standard credits weekly. Small clips of ‘exotic’ Pre CDM RE VCUs continue to transact at $4/5 levels commanding a $1/2 premium to ‘standard’ Chinese and Indian RE VCUs. Gold standard interest is increasing with counterparties focusing on either small clips of issued credits or non typical projects in early development. Issued credits are €8/9 bid/offered while premium forwards are €10/11 bid/offered. Africa remains the ‘must have’ location across standards with methodology and pricing playing a less significant role in decision making.
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Posted on September 29, 2009 · in Market Summary
The US is currently dominating trading activity in the global voluntary carbon market. While the rest of world endures a slowdown, strong demand for CRTs as well as persistent volumes on CCX coupled with a growing stream of privately negotiated transactions are eclipsing activity in Europe and elsewhere. Continue
Posted on September 23, 2009 · in Market Summary
Voluntary trading has seen an encouraging resurgence following the return of market participants from the summer break. Increasingly bullish VER offers were the hallmark of the week with demand starting to catch up with recent vintage pre-CDM RE VCUs $3@4. Charismatic pre-CDM VCUs are $4@$5.25 bid/offered while pure and non RE VCUs are $1- $2 lower. Forestry offsets of all methodologies are receiving interest however considerable project volumes and complexity combined with delivery risk are promoting a cautious approach from buyers. Forestry credits are currently $4@$9 bid/offered. African credits remain on buyer wish lists despite a lack of issuance, $5@$10 bid/offered depending on project.
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Posted on September 14, 2009 · in Market Summary
VER market activity is gently improving as the holiday season has receded. The clamour for US CAR CRTs and more recently, African VCUs is helping to grow demand. As end-users increasingly specify African-originated credits, bids are being given at unusually early stages i.e. at validation due to the demand/supply imbalance. Exotic recent-vintage RE offsets are trading at around $4/5, bid/offered with standard India and China RE offsets at $3/3.50, bid/offered. Interest in forestry projects remains though long dated issuances continue to affect pricing. Continue
Posted on September 8, 2009 · in Market Summary
US CAR CRT demand is growing with multi-year strips within 2009–2016 trading at between $7/$8. As the CAR seeks to broaden its range of methodologies and enlarge supply so as to deepen liquidity and dominate the US market, the following are under consideration: Coal Mine Methane, Organic Waste Digestion, Ozone Depleting Substances and N2O from Nitric Acid Plants. On exchange, the CCX CAR-CRT Futures DEC 10 non-vintage specific strip settled at $4.25 while the CCX CAR-CRT Dec10-Dec15 vintage 09 strip settled at $6.57, both with no volume posted.
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Posted on September 1, 2009 · in Market Summary
VER activity is picking up with market participants returning from the summer slowdown and the improved economic outlook in Europe driving end user demand for exotic VCUs. Interest continues to centre on non-typical project locations and methodologies with African credits and close to issuance Forestry offsets top of buyer wish lists. Recent vintage RE projects remain at $4 levels with non-RE VCUs valued at around $2.25. Exotics are commanding a $0.50/$1 premiums.
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Posted on September 1, 2009 · in Market Summary
Trading activity in the VER market remains slim and continues to be dominated by demand for offbeat projects with non-typical locations and methodologies. Gold Standard credits are priced around €6-€10 with African offsets commanding the highest values. Uncertainty in over domestic legislation in the US and Australia combined with a slower growth in demand for new offsets and an abundant supply of Chinese and Indian VERs in particular has reduced prices stalled trading.
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Posted on August 18, 2009 · in Market Summary
The Dec09 secondary CER contract finished up €0.40 at €12.70 with carbon largely unchanged and said to be tracking stagnant oil prices. Volumes were extremely thin last week in the expected summer slowdown while better than expected US unemployment figures helped ease concern. Primary CER supply is thin as project developers elect to hold onto their credits amid depressed prices.
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Posted on August 12, 2009 · in Market Summary
Volumes on CCX improved over the previous week with 182.8kt traded and the 2007 contract being the most popular. The 2009 contract closed the week $0.05 down on the previous Friday, at $0.45. CAR OTC CRTs forwards are hovering around the $7 mark with spot trading $2-3 higher.
The Dec09 secondary CER contract lost half a Euro to close the week at €12.30, with prices diving from mid-week. The EUA-CER spread narrowed slightly and the market is braced for a few slow weeks trading as many traders take annual leave. Primary CER buyers are accepting smaller sizes with most deals being built around an €8 level.
Recent vintage RE VCUs remain around $4/5 levels with older vintages and EE projects discounted. US VCUs attract a $1 scarcity premium. GS VERs are €8/9 for spot with forwards bid/offered at €6/9. Continue
Posted on August 4, 2009 · in Market Summary
Voluntary trading has slowed during the summer period with most market participants taking annual leave. Demand remains dominated by small clips of either exotic RE or bargain priced VCUs. Issued, recent vintage, RE VCUs from SE Asia, South America and Africa are transacting at $4/5; credits from China and India are trading at $2.50/3.50 levels. American VCUs are holding steady at around $5.
Gold Standard demand has slowed as buyers hold on for interesting projects from unusual locations. Price levels remain at €8/9 for issued credits with a wide spread of €7-10 for forwards.
Interest in US CAR CRTs remains strong with Sellers setting bullish ask levels for bidders. However the inclusion of Mexican LFG projects and the expansion of locations and methodologies, including to-be-completed Brazilian and Mexican forestry protocols are promoting an assumed future international outlook with improved liquidity and could stabilize pricing. OTC ‘carrots’ have ticked up to mid $7 levels for early stage projects with forward vintages of registered projects attracting post $10 levels.
The 2009 CCX CFI settled the week at $0.50, the lowest level to date with traded volumes constricting by over 1.7 million tonnes to a miniscule 116,900 total tonnes. The vintage spread remained wide with volumes offered from 2004 -10.
The Dec 09 secondary CER contract closed the week up around €0.05 at €12.83 despite minimal volume being exchanged. Carbon tracked a slight upward movement in oil prices while UK gas and European coal levels remained stable.
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Posted on July 27, 2009 · in Market Summary
VER trading remains consistent with demand continuing to centre on recent vintage, issued RE VCUs. Exotic credits from SE Asia, South America and Africa are commanding $1 – 1.50 premiums at $4/5 bid/offered while standard RE China and India VCS offsets are trading at $2.50/3.50 levels. REDD forestry projects are drawing renewed interest following the Voluntary Carbon Standard posting methodology approval processes for public comment coupled with the expected future shortfall in supply of credits for the US market. Several countries including Brazil, Cambodia, Indonesia and Papua New Guinea have outlined REDD revenue and monitoring rules while running trial schemes in anticipation of inclusion in a global ETS. A wide pricing spread remains with credits offered at between €3 – 7 per tonne.
Gold Standard activity is sporadic as buyers await issuance of non-typical projects. Issued credits are €8/9 while small clips unusual offsets from exotic locations are trading at between €7 – 10.
Demand for US offsets continues to grow with buyers focusing on 5 year strips out to 2018. OTC CAR CRTs remain $7/8 for projects in early development with forward vintages of registered projects attracting up to $12. An abundance of US VCS offsets is holding prices at around $5.
The 2009 CCX CFI continues to slide, closing at an all time low of $0.55 despite sizable volumes trading throughout the week. A total of 1,826,400 tonnes was exchanged with the vintage spread widening to 2003 -10.
The Dec 09 secondary CER contract closed the week up around €0.70 at €12.78 in response to unexplainable strong buyer demand and a flat energy complex.
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Posted on July 21, 2009 · in Market Summary
VER trading activity for pre-CDM credits slowed last week while the market for US-originated credits continued to build. The propsoed delays to the legislative passage of the Waxman – Markey bill did nothing to abate interest for Climate Action Reserve ‘carrots’ with a lack of projects pushing-up demand for future vintages in anticipation of being eligible for future compliance purposes. Prices fof OTC CRTs remains at $7/8 for projects in early development and closer to $9 for those nearing registration; there is a $1 premium increment along the curve, with pricing in contango. US VCS offsets are holding at around $5. Trading of CAR CRTs on CCFE remained stagnant with no volumes recorded during the week, maintaining the Dec 2009/18 year strip at $5.64.
Despite a quieter week, demand continues to focus on recent vintage, issued RE VCUs from SE Asia, South America and Africa at $4.50 levels. Standard non RE pre-CDM projects from China, India and Turkey are trading lower, at around $3/3.50. Gold Standard bid interest is preferring non-typical locations like Africa. Small clips of such projects early in the life cycle are being priced at €7 – 10 compared with €8/9 for issued credits from China and India. The CCX CFI Dec 2009 contract closed down $0.30 returning to record lows of $0.60 from $0.90 the previous week. A considerable 2,231,900 tonnes traded over the week, mainly in the newer 2006-09 vintages and with 1.4 million tonnes exchanged alone on Thursday.
The Dec 09 secondary CER contract closed the week up around €0.13 at €12.08 corresponding to strong German power prices. Market optimism following government carbon reduction commitments led to oversubscription in the UK EUA auction contributing to a widening of the EUA – CER spread.
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Posted on July 13, 2009 · in Market Summary
MF Global Weekly CDM & VER Market Summary 27th April – 3rd May 2009
May 8, 2009 Read the full article →