EU Market: EUAs turn upwards as auction attracts month-high bidders

Published 10:58 on August 6, 2015  /  Last updated at 15:14 on May 11, 2016  /  EMEA, EU ETS  /  No Comments

EU carbon prices halted their recent slide on Thursday after a government auction cleared above market and attracted the highest number of bidders for a month.

EU carbon prices halted their recent slide on Thursday after a government auction cleared above market and attracted the highest number of bidders for a month.

The benchmark Dec-15 EUA contract settled up 1 cent at €7.85 on ICE Futures Europe, on thin trade of less than 3.5 million.

This follows two sessions of steady decline for carbon since sneaking over the €8 mark on Tuesday.

The EU’s sale of 1.459 million spot EUAs cleared 2 cents above market at €7.83 at 0900 GMT with an above average bid-to-cover ratio of 4.14.

There were 18 bidders, the highest number since July 7, which was also the last time an auction had cleared above market.

The bidder number was slightly above the year’s average of 17 but contrasts with lower numbers earlier this week and comes as daily auction volume is around half normal levels to adjust for what is supposed to be lower demand while traders take summer holiday.

German clean dark spreads for 2017 and 2018 climbed back to Monday’s levels on Thursday as a stronger euro made imported coal slightly cheaper for European utilities, providing a slightly bullish signal for carbon, though the spreads were still off levels seen last week.

Below are the auctions 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             +€0.02 v market, btc 4.14

8/7/2015              DE           1,599,000

By Ben Garside – ben@carbon-pulse.com

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