EU carbon prices gained 1.3% on Thursday to resume their upward trajectory following the previous session’s sideways trade.

Front-year EU Allowance futures trading on ICE settled up 7 cents at €5.61, a cent off the day’s high, after recovering from a low of €5.42.

Prices inched higher through the afternoon, climbing to an intraday high of €5.62 – some 5 cents off Tuesday’s 10-week high.

Volume was steady at around 13.1 million units, with a hefty 7.7 million changing hands across other vintages.

This was in contrast to the upward moves earlier in the week, where nearly all dealing was centred around the benchmark Dec-16 contract.

This could indicate that gains are being driven by utility buying and carry trades rather than speculators, possibly making the latest rise more sustainable.

However, the signal from the energy complex was mixed on Thursday.

German clean dark spreads fell 6% on the 2017 vintage as a spike in coal prices outpaced rising power prices. The 2018 and 2019 spreads were little changed.

EUAs rose as much as 7 cents just after the EU spot auction price was announced at 0900 GMT.

The sale cleared at €5.47, two cents above secondary market for the third consecutive EUA auction, with above-average bid coverage of 2.65.

By Ben Garside – ben@carbon-pulse.com