EU Market: EUAs hold ground despite bearish auction, energy

Published 18:08 on November 11, 2015  /  Last updated at 18:08 on November 11, 2015  /  EMEA, EU ETS  /  No Comments

EU carbon prices were unchanged on Wednesday, defying a weak government auction and bearish signals from the energy complex.

EU carbon prices were unchanged on Wednesday, defying a weak government auction and bearish signals from the energy complex.

Tthe Dec-15 EUA contract settled flat at €8.44 on ICE, near the middle of the day’s €8.37-8.51 range on steady turnover of 11.9 million.

The benchmark EUA briefly crossed the middle Bollinger band and 20-day moving average of €8.49 and stayed well above its lower Bollinger band of €8.28, having bounced off the technical indicator on Tuesday.

The front-year futures opened in positive territory but turned south after details of the UK’s auction emerged.

The UK sold 3.123 million spot EUAs at 5 cents below market and with bid coverage of 1.47, the lowest since Apr. 29.

Dec-15 EUAs fell 4 cents in the minutes after the result was published and took several hours to claw back the ground.

The week’s two previous auctions had bid coverage above the year’s average, a sign of strong demand that some observers identified as helping to support prices on Tuesday.

Calendar 2017 and 2018 German clean dark spreads took a further hammering on Wednesday, falling 7.5% and 13.6% respectively to extend multi-month lows along the curve, dampening any buy signal among utilities.

The measure of profitability narrowed as German power prices slumped, which was only partially offset by cheaper coal prices and a stronger euro.

By Ben Garside – ben@carbon-pulse.com

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