EU Market: EUAs slip to settle at lowest level in a month

Published 20:37 on May 27, 2015  /  Last updated at 15:03 on May 11, 2016  /  EMEA, EU ETS  /  No Comments

EU carbon prices lost ground for the second consecutive session on Wednesday, falling 5 cents in thin trade of around 8 million units.

EU carbon prices lost ground for the second consecutive session on Wednesday, falling 5 cents in thin trade of around 8 million units.

Front-year EUAs settled at €7.21 on ICE, near the bottom of the day’s €7.19-7.27 trading range and the lowest settlement since Apr. 27.

The benchmark contract has lost nearly 20 cents since Tuesday afternoon’s widely-expected approval of the MSR text by the European Parliament’s environment committee.

Today’s move pushed the front-year futures further below the lower band of the roughly 60-cent trading channel that they had been trading within since bouncing off a year-low of €6.28 on Mar. 13.

The fall put the Dec-15 EUAs below their 50-day moving average of €7.23 and near the 100-day MA of €7.17.

With few policy developments on the horizon and amid narrowing German dark spreads, market watchers said traders have fewer reasons to buy carbon in the near term, though they expect prices to gradually increase over the second half of 2015.

Trading has been quiet over the past two sessions as many dealers are attending the Carbon Expo conference in Barcelona, which ends tomorrow.

Nevertheless, the UK’s auction was almost twice oversubscribed, selling 3.123 million spot EUAs at €7.15, a cent below market.

Signals from the energy complex were slightly bearish, with year-ahead baseload German power prices down 9 cents to €31.31/MWh on EEX, and key coal and gas prices little changed on ICE.

By Ben Garside – ben@carbon-pulse.com