Me ol mate Moosie wanted me to share these gems. I think he could be on to something here but its not for me. (Any investment that does not return me a dividend no longer meets my investment criteria)
https://i.stuff.co.nz/environment/cl...ge-must-be-now
I see all futures prices are above the $50 reserve ceiling and Spot is about to tip over. Very interesting going into 1 September auction, as it puts immense buy pressure on everyone and releases the 7.5M reserve units on top of the 4.75M for the auction. If everything gets bought (coverage ratio was 1:1 last auction, including reserves...) then there is going to be a large imbalance between supply and demand for the next few auctions...
I see that someone has finally created a CO2 thread on ST. There are a few pointers I can give that may help out those doing their research.
NZSU auctions occur quarterly, with 4.75M on offer below the ceiling price ($50.00) When that ceiling is breached, a "reserve" of 7.0M units can be thrown into the auction. The latest auction result shows that there was a high amount of demand (10.8M shares) with a clearing price that was above the spot price at the time. Cover ratio nearly a solid 1.0 including the reserve units. (See: https://www.etsauctions.govt.nz/publ...noticeboard/14)
Now, if we look at the current spot price, well, my oh my, that ceiling price is now well breached for futures prices - spot is not far behind either... (see: www.commtrade.co.nz)
We also have a big buyer about to come into the market to make up for units they just gave up. GNE needs to buy up 1.6M credits over the next 2-3 years - not an insignificant amount when there are only 26M credits being created this year (see: https://i.stuff.co.nz/business/12593...-100m--analyst)
It also pays to see the final advice the Climate Commission gave to the Government. A ruling is expected from the Labour Government in December of this year about pricing in the ETS. The current advice is to raise the ceiling to $70 and tack on 10%+ per annum to account for inflation (and to squeeze carbon producers...). (See: https://www.climatecommission.govt.n...-for-aotearoa/)
Finally, it pays to keep track of overseas carbon futures prices. These are much, much higher than ours currently (see: https://m.investing.com/commodities/carbon-emissions). 55 Euros = $93 NZD.
I'm surprised more people haven't cottoned on to the fact this is a license to print money. Still plenty of room to move for a few years yet!
Feel free to post on ST. ��
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Originally Posted by Newman
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