GFI Said to Shut Dedicated Carbon Broking Desk as Trading SlumpsMathew Carr and Alessandro Vitelli
GFI Group Inc. closed its carbon desk in London and transferred the business to other teams amid a slump in over-the-counter trading of European permits, according to two people with direct knowledge.
GFI, an interdealer broker based in New York, will now handle carbon through teams trading related products such as energy, said the people, who asked not to be identified because the change hasn’t been publicly announced.
“We keep our product offerings and the make-up of our desks under constant review in order to ensure that we are operating in an efficient manner,” GFI said in an e-mailed statement that didn’t confirm the specific changes.
Trading in European Union emission allowances via brokers slumped 79 percent last month from a year ago to 50 million metric tons. Volumes on ICE Futures Europe, the biggest exchange for the permits, rose 11 percent in September to 581 million tons, according to data from the London Energy Brokers’ Association and ICE. The price of allowances plunged 23 percent this year amid a record glut in supply.
The EU carbon market had a surplus of 1.8 billion metric tons of carbon allowances and credits in the five years through 2012, according to Bloomberg New Energy Finance in London. This year’s supply of EU carbon permits is 2.1 billion tons, according to European Commission data.
Permits for December fell 1.2 percent to 5.12 euros ($7.01) a ton at 11 a.m. on ICE in London.