CCAs trade lower in light weekly volume

SAN FRANCISCO- June 7 (Reuters Point Carbon) - California carbon allowances (CCAs) for delivery in 2013 slid 5 cents from their close one week ago to end Thursday at $15.50 per tonne in the lightest weekly trading volume so far this year.

Just 10,000 CCAs changed hands in two trades this week on the IntercontinentalExchange (ICE), with all of the action taking place on Thursday.

In the over-the-counter market, CCAs were bid at $15.25/t and offered at $15.75/t, one broker said.
"It seems like the market is just waiting for time to pass and for more people to get into the game," a second broker said Thursday. "The same people can only trade so much with each other until others get in on the fun."

Many in the market believe there will not be any significant trading volume or price swings until after the November allowance auction.

OFFSETS
No trades were reported for California carbon offsets (CCOs), where buyers and sellers are engaged in a standoff over credit prices.

Bids for offsets derived from the destruction of ozone-depleting substances (ODS), the most popular type of compliance-grade credit, have recently inched up from $6.50/t to $7.25/t, but sellers have refused to meet buyers at any price lower than $7.50/t, a broker said.

"The sellers have drawn a line in the sand and are content to sit at the $7.50/t level," he said.
Sellers have said that a price less than $7.50/t they would be approaching the cost of producing the credits, the broker added, although he said they may just be posturing.

Other sellers believe that offset credits, which are supposed to serve as a lower-price compliance instrument, should not be selling at a discount greater than 50 percent of an allowance.

RGGI
No trades were reported for allowances in the northeast's Regional Greenhouse Gas Initiative (RGGI) this week, market sources said.

RGGI allowances for delivery in December 2012 were bid at $1.93 and offered at $2.00 in the over-the-counter market this week, unchanged from a week ago, sources said.

RGGI auctioned 36.4 million 2012 allowances on Wednesday.

The number of allowances sold and the clearing price for those permits will be announced on Friday, a RGGI spokesperson said.

Brokers in the market expect the allowances to clear around the program's reserve price of $1.93/t. (Reporting by Rory Carroll; editing by Bob Burgdorfer and M.D. Golan)