What is becoming increasingly more evident is that more and more companies which are advising Eastern European players are saying that good amounts of this touted Phase I surplus will, in fact, never come to market.
Consider the implication. Prices have fallen on speculators finally realizing that this is a beautiful Short because the EU compliance companies need X and there are X+10% out there to be purchased. But since the market is full of conservative utilities that are only buying-as-they-burn, and at some point in the distant future (I would say a cold November in 2007) the market realizes that there are really only X-1% in circulation, then there may indeed be a scramble to buy.
Where does this "never come to market" idea come from ? Well, from those dutiful, persistent and bludgeon-like intermediary advisers in eastern Europe. Consider those Polish allowances that were making the news last summer but without a real deluge (nor even a decent splash) that followed. And add to that the new entry countries
Of course, no one is saying 'go long'. But someone is saying, don't be surprised if the price is up around 10 to 15 Euros for a period near the end of Phase I.
You heard it here, first.
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