REC Trading Report – February 2012

Traded volume exceeded 2 lakh RECs for the first time. Total volume traded was over 206,000 (vs. 171,000 in January; an increase of 20%). The total traded value exceeded Rs 63 crore (21% increase over previous month).
The market clearing price (MCP) at IEX was Rs. 3066 (previous month – Rs.3051; an increase of 0.5%), whereas the MCP at PXIL remained as it was in the last month i.e at Rs. 3051.
Demand growth was below expectations. Total demand fell by 10% vs last month (to 389,000 from 432,500 last month). The market has expected a robust growth in demand as there is only one trading session left before the end of the first effective compliance period.

On the other hand the supply increased by more than 20 % from January’s trade session. Over 234,000 RECs were bid for sale, representing 97.5% of the total available in the market. This is a significant jump from the past 3 month average of 86%. High pricing along with expectation to possible fall in prices after March is probably driving such a high participation.
The high participation by seller, low growth in demand and marginal increase in prices indicates that the market has peaked in terms of pricing. Since March will be the last trading session, a jump in demand is expected. However, there will be pressure on sellers too, as prices are expected to drop in April (next compliance will be a year away).
No Solar RECs were traded this month.
Try India’s First Online RPO Calculator here