ChinaCarbon.net.cn, March 29, 2016: The Guangdong emissions exchange held their third auction for the 2015 compliance year on Tuesday. The auction cleared all 500,000 allowances offered at the floor price of Y12.69/ton.
The auction, despite clearing at the floor, was oversubscribed with a bid ratio of 1.1. A total of nine companies participated in the auction, eight of which were successful in winning allowances. Bids ranged from Y12.69/ton to Y16.49/ton.
In retrospect, the clearing of the March auction was much lower than the previous two although it did offer 1.6 times the allowances. Both the previous auctions cleared well above the set floor price: the first at Y16.10/ton and the second at Y15/ton.
Additionally, the clearing is notably lower than the prices in the secondary market which closed at Y16.20 last week after trading a total of 573,008 on the emissions exchange. It now remains to be seen how the secondary market will react to the new price discovery. On Tuesday, the market closed at Y16.40/ton after a total of 280,010 allowances were traded.
Rahul Rana (firstname.lastname@example.org)