EU Market: EUAs dip to extend two-week low

Published 17:51 on November 4, 2015  /  Last updated at 17:51 on November 4, 2015  /  EMEA, EU ETS  /  No Comments

EU carbon fell on Wednesday to briefly extend the previous session’s two-week low by 3 cents as a bullish energy complex failed to tempt buyers.

EU carbon fell on Wednesday to briefly extend the previous session’s two-week low by 3 cents as a bullish energy complex failed to tempt buyers.

The benchmark Dec-15 EUAs settled down 5 cents at €8.40 on ICE after trading in a €8.36-8.52 range, with the intra-day floor the lowest level seen since Oct. 20.

Prices failed to get back above their 20-day moving average, at €8.47, which they fell below on Tuesday for the first time since Oct. 7. The Dec-15s edged closer to their 50-day average at €8.27, which has acted as technical resistance over the previous two months.

Turnover was brisk at 20 million, beating Tuesday’s 19 million when carbon dropped out of its narrow upward-sloping band that had seen prices rise 6% over October. An unusually high 7.7 million units changed hands EFP on the Dec-15s.

Some 6 million units were traded on the Dec-16 futures, more than 5 million of which was linked to spread trades.

Today’s losses came despite a stronger energy complex, which saw German clean dark spreads claw back some of Tuesday’s moderate losses but remain well below last week’s levels.

This was mainly due to a 65-cent drop in dollar-denominated coal, which was only partially offset by a weaker euro. The common currency extended its three-month low against the dollar as US Federal Reserve Chair Janet Yellen flagged the “live possibility” of an interest rate hike in December.

German baseload power prices ended mixed on EEX.

STRONG EUAA SALE

A group of 25 EU member states sold 933,000 spot EUAAs for €8.25 each earlier in the day, in an auction that cleared 23 cents below the Dec-15 EUA price at 1000 GMT, the time the bidding window closed.

The discount was well below the average 30 cents seen in the previous eight aviation allowance auctions.

A total of 11 bidders submitted bids equivalent to a combined 3.75 million units, but only three were successful.

The sale was the bloc’s penultimate EUAA auction for 2015.  The UK is due to sell a further 839,000 units on Nov. 18.

The Dec-15 EUAA futures settled down 1 cent at €8.20 on ICE, on volume of 175 lots traded.

By Ben Garside and Mike Szabo – ben@carbon-pulse.com

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