EU Market: EU carbon slides further despite auction cull

Published 10:23 on August 5, 2015  /  Last updated at 15:14 on May 11, 2016  /  EMEA, EU ETS  /  No Comments

Benchmark EU carbon prices continued to slide on Wednesday, dropping below two technical support levels to end beneath the previous week’s floor on modest trade of less than 7 million units.

Benchmark EU carbon prices continued to slide on Wednesday, dropping below two technical support levels to end beneath the previous week’s floor on modest trade of less than 7 million units.

The Dec-15 EUA futures settled down 7 cents at €7.84 on ICE, having eventually dipped below €7.85 in late trade after several attempts in afternoon trade.

The €7.85 mark is last week’s bottom trade and had been identified by analysts and traders as a support level, which if breached could trigger further declines.

“There’s just no one around to do the buying. The auctions are lower this month for a reason,” said one trader, who had pegged support slightly lower at €7.80.

The benchmark carbon contract has fallen steadily since sneaking over the €8 mark on Tuesday, when it lost 5 cents.

Meanwhile, Dec-15 CERs lost 2 cents to settle at €0.42 on very thin trade.

STRONG UK AUCTION

The UK’s auction of 1.5645 million spot EUAs cleared at €7.82 at 0900 GMT, the same level as prices in the secondary market, with a bid-to-cover ratio of 2.63.

There were 14 bidders, one more than for the EEX-hosted sales earlier this week but below the year’s average of 17.

August auction volume is a little less than half the 2015 monthly average market to adjust downwards for the lower August demand.

Below are the sales this week, distance to market, bid-to-cover ratios:

8/3/2015              EU          1,459,000             -€0.01 v market, btc 2.5

8/4/2015              EU          1,459,000             €0.00 v market, btc 4.21

8/5/2015              UK          1,564,500            €0.00 v market, btc 2.63

8/6/2015              EU          1,459,000

8/7/2015              DE           1,599,000

By Ben Garside – ben@carbon-pulse.com

Comment