APRIL MPI HEADLINES
- SO2 EA MPI Up 1.66%
- Dry April Knocks NOx EA MPI Down
- NOx EA Swap Strategies
- NOx SIP Call Re-Hearing Requested
- NOx EA PFC Ratio Revised Slightly
- Quality Greenhouse Gas Reductions Available
- >20 Million Sold and Optioned
What are the Cantor Fitzgerald SO2 and NOx MPIs?
The Cantor Fitzgerald Market Price Indices (MPIs) are prices that
reflect current market conditions for Clean Air Act Title IV SO2 and
Ozone Transport Commission NOx emission allowances. The MPI is an
average of the following three numbers (where available) (Note: fees
and commissions are not factored into the MPI):
- Recent price - prices from the most recent transactions
(sales, swaps, and options) either executed by Cantor Fitzgerald
and/or reasonably believed by Cantor Fitzgerald to have occurred.
Also note that the MPI does not include transactions that are
reported as retirements or facility changes of ownership because
such transactions may not be reflective of current market conditions.
- Lowest offer price - lowest price, reported to
Cantor Fitzgerald, at which a seller is willing to sell.
- Highest bid price - highest price, reported to
Cantor Fitzgerald, at which a buyer is willing to buy.
| Note: All information contained here is obtained by Cantor Environmental Brokerage (Cantor Environmental Brokerage) from sources
believed to be accurate and reliable. However, because of the
possibility of human and mechanical errors, as well as other
factors, such information is provided "as is" without warranty
of any kind and Cantor Environmental Brokerage, in particular, makes no representation
or warranty as to the accuracy, timeliness, or completeness
of this information. Under no circumstance shall Cantor Environmental Brokerage have any
liability to any person or entity for (a) any losss or damage
in whole or in part caused by, resulting from, or relating to
any error (negligent or otherwise) or other circumstance involved
in procuring, collecting, compiling interpreting, analyzing,
editing, transcribing, transmitting, communicating, or delivering
any such information, or (b) any direct, indirect, special,
consequential, or incidental damages whatsoever even if Cantor Environmental Brokerage
is advised in advance of the possibility of such damages, resulting
from the use of, or inability to use, any such information.
The data and information contained herein are, and must be construed
solely as statements of opinions and not statements of fact
or recommendations to purchase, sell, or hold SO2 or NOx EAs.
All prices are merely indications of interest, do not represent
firm bids and offers, and their terms are subject to change
without notice. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY,
TIMELINESS, COMPLETENESS, MERCHANTABILITY, OR FITNESS FOR ANY
PARTICULAR PURPOSE OF ANY SUCH DATA OR INFORMATION OR OTHER
OPINION IS GIVEN OR MADE BY Cantor Environmental Brokerage IN ANY FORM OR MANNER. |
SO2 MARKET PRICE INDEX and NEWS:
(Call 212 938-4250 or 800-228-2955 ext 5 for description)
View SO2 MPI
History
|
Bids |
Offers |
Trades |
APRIL
MPI |
| Price/Volume |
2,500 @ |
$136.00
======== |
2,500 @ |
$138.00
======== |
not listed
============ |
|
| Weighted Average |
|
$136.00 |
|
$138.00 |
$139.13 |
$137.71 |
|
* Bid and offer for vintage 2000 allowances.
Immediate Settlement:
|
Period of Stream |
Best Prices ($/Allowance) |
Maximum Volume |
|
| Term |
Start |
|
End |
Bid to Buy |
Offer to Sell |
Bid |
Offered |
|
1 year
1 year
1 year
1 year
1 year |
2000
2001
2002
2003
2004 |
|
|
$136.00
$134.99
$134.32
$133.33
$132.04 |
$138.00
|
2,500
2,500
2,500
2,500
2,500 |
$2,500
|
Allowances
Allowances
Allowances
Allowances
Allowances |
|
Swaps:
| Swap Ratio's against vintage 2000 allowances |
| |
2001 |
2002 |
2003 |
2004 |
| |
|
|
|
|
| Offer |
0.75% |
1.25% |
2.00% |
3.00% |
|
|
| Ratios for base years other than 2000 are available
upon request. |
| DISCLAIMER: ALL PRICES ARE MERELY INDICATIONS OF INTEREST,
DO NOT REPRESENT FIRM BIDS AND OFFERS AND THEIR TERMS ARE SUBJECT
TO CHANGE WITHOUT NOTICE. THE ABILITY TO EFFECT TRANSFER OF ALLOWANCES
IS SUBJECT TO THE FINAL PROCEDURES GOVERNING THE TRANSFER OF ALLOWANCES
WITHIN THE ENVIRONMENTAL PROTECTION AGENCY'S ALLOWANCE TRACKING SYSTEM. |
SO2 EA Market Beat
The Cantor Fitzgerald Market Price Index increased by 1.66 % this month
to $137.71 from $135.47 in March. Trading was reasonably heavy this month
following the EPA Auction. The trading range this month was $128.00 to $140.25.
The last trade went off at $137.50.
As always Cantor Fitzgerald does not trade for its
own account. All allowances purchased in the auction or traded in the
open market are for our clients. It is Cantor Fitzgerald’s policy to keep
the identity of our clients and their positions in the market in strict
confidence.
NOx MARKET PRICE INDEX and NEWS:
(Call 800-228-2955 ext 5 or 6 for description)
View NOx OTC MPI History
| BEST BIDS TO BUY |
1999: 50 tons @ $525/ton
2000: 50 tons @ $775/ton
2001-02: 50 tons @ $700/ton
2002: 50 tons @ $700/ton
|
| BEST OFFERS TO SELL |
1999: 50 tons @ $650/ton
2000: 50 tons @ $840/ton
2001: 100+ tons @ $800/ton
2002: 50 tons @ $900/ton
|
| RECENT TRADE PRICES |
$750/ton (2001)
$805/ton (2000)
$825/ton (2000)
$573/ton (1999)
$610/ton (1999)
$25/ton premiums (00 for 01 Swap)
$825/ton (2000)
$850/ton (2000)
$875/ton (2000)
$875/ton (2000)
$875/ton (2000)
in chronological order |
| MARKET PRICE INDEX |
1999 = $589/ton
2000 = $821/ton
2001 = $750/ton
2002 = $800/ton
|
SO2 A Dry April Knocks the NOx EA MPI
Down
The March MPI stands at $589/ton for vintage 1999s and $821/ton for vintage
2000s. This month we have also added MPIs for vintage 2001 and 2002. Vintage
2001 stands at $750/ton and vintage 2002 at $800/ton. Relative to March,
the vintage 1999 and 2000 MPIs are down. Why? There were some anomalous
trades that occurred in these vintages (more on this below). Because there
were as few as six trades market-wide, those trades that did occur may
have had a disproportional impact on the MPI. Market observers speculate
that the relative lack of volume in April may be because compliance buyers
are holding off on trading until the ozone season commences (May 1). Greater
volumes may return as we cross the threshold into the ozone season and
buyers focus their attention more keenly on their compliance needs.
MARKET NEWS:
NOx EA Market Details
Vintage 2000 EAs traded three times with a low reported at $805/ton and
a high of $825/ton. Also, two vintage 1999 trades occurred within a day
of each other. The first vintage 1999 trade was reportedly at $610/ton.
The second traded at a substantial discount -- $573/ton. Adjusting these
for the PFC ratio results in prices of $811/ton and $762/ton. The $573
($762 PFC adjusted)/ton price seems very low considering that the vintage
2000s traded at $805/ton almost simultaneously. Normally, vintage 1999
NOx EAs trade at a natural discount of 25% because of the PFC ratio adjustment
(relative to vintage 2000s). Here, the $573/ton buyer clearly did well,
receiving a discount of almost 30% compared to the price of vintage 2000s.
Sellers should be aware that it is possible to use vintage 1999 EAs
for compliance in 2000. Also greater value may be gained by selling an
equivalent amount of vintage 2000s and utilizing 1999s for compliance.
Another interesting trade occurred for vintage 2001 EAs at $750/ton. This
also represents a discount to the current vintage and is a possible indicator
of the market’s perception of future EA prices. The Ozone season is
only days away. Are you ready? Call us if you are thinking of entering
the market or have questions.
NOx EA Swap Strategies
Considering a swap? A swap could help you maximize profit potential. Swaps
are an interesting, if under-utilized, method of trading NOx EAs. EAs
can be swapped for almost any type of commodity. Market players have swapped
NOx EAs for SO2 EAs. They have also swapped one or both for emission reduction
credits, RECLAIM Trading Credits (RTCs), greenhouse gas reductions, coal,
fuel, electricity, and a variety of other items. Swapping can greatly
increase the liquidity of your position and offers another way to transact
when cash transactions are not desired and/or optimal. Call us with your
questions regarding swap strategies.
NOx SIP Call Re-Hearing Requested
As we indicated in last month’s bulletin, the plaintiffs in the SIP Call
lawsuit last week filed a request for re-hearing with the U.S. Court of
Appeals for the District of Columbia. The preliminary basis for the request
is that EPA should not have relied upon level of impact, as opposed to
costs, in assessing each state’s contribution to the ozone problem. We
will keep you advised of the outcome.
NOx EA PFC Ratio Revised Very Slightly
EPA minimally revised the official PFC ratio. The revision renders the
final PFC ratio at 0.50:1, instead of 0.49:1. The change occurred in recognition
of the state of Rhode Island continuing to use its OTC allocation within
state boundaries only. Unused allowances will be retired (as was done
for the 1999 ozone season). No further revisions to the PFC ratio are
anticipated by EPA.
Want to learn more about emissions trading?
Why not attend one of the many conferences featuring Cantor Fitzgerald speakers?
Here are a few upcoming events that you may wish to check out:
- EMA, New Orleans, Lousiana - 5/9/00 - The Role of Electronic Exchanges
in Emissions Trading
- Environmental Finance Conference, New York, NY - 5/16-17/00 - Profiting
From a Carbon Credit Market
- AiC, Sydney, Australia - 6/13-15/00 – ET Programs Around the US
and Risk Management Tools & Strategies
Cantor Environmental Brokerage Staff and Phone Numbers...
| Carlton Bartels, Managing Director |
New York |
GHG and All Products |
212-938-4250 |
| Josh Margolis, Senior Vice President |
San Francisco |
GHG and All Emissions |
415-296-9359 |
| Ed Murphy, Director |
New York |
Weather |
212-938-2522 |
| Robin Langdon, Vice President |
San Francisco |
RTCs/ERCs/DERs |
415-296-9495 |
| Andy Kruger, Vice President |
Darien, CT |
ERCs/NOx EAs/DERs |
203-662-3638 |
| Tony Gallagher |
New York |
Coal |
212-938-4670 |
| Ralph Mercurio |
New York |
Coal |
212-938-4670 |
| Jude Moussa, Associate |
New York |
SO2/NOx EAs |
212-938-4250 |
| Laurie Gage, Broker |
New York |
SO2/NOx EAs |
212-938-4250 |
| Christine Grandstaff, Associate |
Los Angeles |
RTCs/ERCs/DERs |
949-597-0517 |
All Cantor Environmental Brokerage offices can be reached by calling 1-800-228-2955,
or by E-mail at Cantor Environmental Brokerage@cantor.com
|
