EUA prices slipped 6 cents on Wednesday after a range-bound session in which trade was muted by buyer fears of getting caught out by sudden price drops on MSR-related news flow.

The benchmark Dec-15 EUA contract settled at €6.81 on ICE, near the middle of the day’s €6.76-6.89 range.

Around 9 million units changed hands on the contract, almost half the previous day’s turnover.

“A really quiet day, and it’s all down to the politics again,” said one trader, adding that buyers were fearful of taking positions while national governments were still to agree a unified position on the MSR.

Prices fell almost 20 cents on Tuesday to briefly hit a year-low of €6.61 on news that a meeting of national officials failed to reach a deal to allow them to begin negotiating a final text with the EU Parliament.

“You could easily make a mistake, buy now, and then there’s some news about the blocking minority that could hit prices by €1 or €2,” the trader added.

Poland opposes an MSR starting before 2021 and claims the support of seven other countries, enough to block a deal.

Ireland and Estonia came out in favour of an early MSR start at Tuesday’s meeting, Argus and Reuters respectively reported, to add to growing total of nations backing quicker implementation.

But key will be whether Poland’s blocking minority can hold together ahead of the next meeting on the issue scheduled for March 16.

Earlier on Wednesday, the EU sold 1.5 million EUAAs at an EEX auction that was almost three times subscribed.

The sale cleared at €6.48, some 32 cents below the value of the equivalent EUA contract.

By Ben Garside – ben@carbon-pulse.com