EU carbon prices recovered from an early dip on Tuesday to consolidate much of last week’s 54-cent rise that saw prices set a new 33-month record high of €8.36.

The Dec-15 EUA contract settled up 3 cents at €8.28 on ICE after trading in €8.19-8.28 range on thin trade of less than 6 million units, retrieving some of Monday’s 8-cent loss.

The EU’s auction of 1.459 million spot EUAs cleared 2 cents below market at €8.17 but was more than four times subscribed for the second day running, above the year’s average of a bid-to-cover ratio of 3.

Analysts warned on Monday that last week’s run-up amid August auction volumes at half average levels could run out of steam this week.

The benchmark contract’s Relative Strength Index (RSI) was at 62 on Tuesday, down from the 70 mark breached on Friday which indicates whether a contract is overbought.

The energy complex gave only a slightly bullish signal for carbon as 2017 and 2018 German baseload clean dark spreads rose by a few cents as heavy losses in dollar-denominated coal markets were partially offset by a weaker euro and softer German power prices.

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

8/17/2015        EU       1,459,000        +€0.01 v market, btc 4.12

8/18/2015        EU       1,459,000        -€0.02 v market, btc

8/19/2015        UK      1,564,500

8/20/2015        EU       1,459,000

8/21/2015        DE       1,599,000

By Ben Garside – ben@carbon-pulse.com