Unlike in October, the November REC trading session had few surprises. Prices increased marginally on IEX (From Rs 2,700 to Rs 2,900), while it fell on PXIL (from 3,000 to 2,800). Total volume sold increased from approximately 95,000 to 105,000 (an increase of 10.5%).
Total demand was for over 278,000 REC (growth of over 18% over previous month). This was significant, given that demand had grown only 3% last month, and prices were on an all time high. One possible explanation of this is that new REC buyers are starting to participate in the market as we approach the end of compliance period (March 2012).
Total RECs offered for sale grew from 138,000 to 186,000 (a growth of 34%, on top of a growth of 62% in October). Number of RECs offered for sale as percentage of total available grew to 78% from 70% last month. Last month’s record prices are likely to have played a role in increased seller participation.
Overall, the fact that we are only 4 months from the end of compliance period, and that prices have increased significantly over the last few months has resulted in increased participation from both buyers and sellers. We can expect the trend to continue in the coming months. The demand and prices may receive a significant push upwards if one of the larger states like Maharashtra or Tamil Nadu were to take steps in enforcing RPO regulations. Short of that, we can expect demand, supply and prices to grow only gradually from here onwards.
No Solar RECs were traded this month.
Press Coverage for November trading session:
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