EU Market: EUAs hold above €8 amid strong auction demand

Published 17:50 on September 23, 2015  /  Last updated at 15:17 on May 11, 2016  /  EMEA, EU ETS  /  No Comments

EU carbon prices kept above the €8 mark throughout Wednesday and were boosted by strong demand from a rare Polish auction and favourable signals from the energy complex.

EU carbon prices kept above the €8 mark throughout Wednesday and were boosted by strong demand from a rare Polish auction and favourable signals from the energy complex.

The benchmark Dec-15 EUA closed up 6 cents at €8.09 on ICE after trading in a range of €8.02-8.12, with the day’s top trade matching last Friday’s settlement.

“There were perfect ingredients for carbon to go up today,” one trader said, citing a stronger-than-expected Polish auction and gains in the euro and power prices.

He said the front-year EUAs could be poised for further gains since they had failed to sustain a move below €8 despite several spells below the psychologically important level earlier in the week.

Poland sold 2.9 million spot EUAs for €8.04 each, two cents above secondary market levels when the sale cleared at 1300 GMT.

The sale attracted bids worth 11.8 million units, which was the most since June 16, and notched an oversubscription rate of 4.14, which was the highest in nearly a month.

German power prices rose 13 cents to €29.60/MWh on EEX, recovering slightly from the 12-year lows reached earlier this week.

Dollar-denominated coal prices recovered slightly from Tuesday’s landmark move below $50 a tonne to reach $50.15 on ICE. But this was eclipsed by a stronger euro, which rose by around a third of a percent on signals from ECB head Mario Draghi that the bank was not immediately planning to extend quantitative easing.

This pushed German clean dark spreads to their highest this week, but they remained some distance away from the multi-month highs reached two weeks ago.

By Ben Garside – ben@carbon-pulse.com

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