Weekly Market Update: 12-16 June

Last week

On Monday 12/06, the EUA prices moved downwards, and closef the session below the 5.00 EUR support level. After trying and failing to break the resistance at 5.10 EUR (or the 200 days moving average), the carbon contracts began trading lower. The market closed at 4.92 EUR (0.12 EUR lower than the previous close.)

On the next day  the EUAs traded in a tight range between 4.91 EUR and 5.03 EUR. We did not see any interesting price movement during the day, mainly because the carbon price did not receive any support from an overall very calm energy sector. The day closed at 5.01 EUR, after trading at a daily high of 5.03 EUR.

On Wednesday 14/06, EUAs drifted lower in the last hour of trading to break below the 100-day moving average support and touched an intra-day low at 4.90 EUR. The session closed at 4.94 EUR (0.06 EUR daily).

On the next day EUAs barely moved. Trading activity was somehow muted as part of Europe had a public holiday. The carbon contracts traded in a narrow 7-cent range and the 4.90 EUR level supported the prices once more. The carbon prices closed at 4.96 EUR, almost unchanged from the previous close. Liquidity was quite low on the ICE, with only 6.1 million changing hands.

On the last trading day of the week, EUA prices reached an intra-day high of 4.99 EUR at the opening, but did not show the strength necessary to push above that level. Prices then slipped downwards towards their lowest point of the day at 4.88 EUR. The market closed the week at the same level (weekly loss of 0.16 EUR).

Key news

British MEP Julie Girling as new lead negotiator for post-2020 EU ETS.  After missing two important meetings in the trilogue negotiations, Ian Duncan was pressured to leave his position and he proposed to his colleague from the Conservative party, Julie Girling, to replace him as rapporteur on the EU ETS reforms. Girling, an MEP from the south west of England, is the rapporteur for the separate proposal regarding  the aviation sector’s role in the ETS beyond this year.

The next trilogue meeting between all three EU institutions on the ETS reform is on June 27, having been rescheduled after Duncan was unable to attend the meeting of May 30th.

Increase of EUA surplus in 2016 for Europe’s biggest steel companies. According to Carbon Market Data in its annual summary of compliance, the surplus of free carbon allowances of the three largest steel companies grew year-on-year in 2016. These three companies are ArceloMittal, Ilva and Tata; and they collectively received 17.7 million free EUAs more than they emitted last year. ArcelorMittal has the biggest surplus at 7 million tons, while Ilva had 6.7mt and Tata 4 mt.  On the other side, are the biggest utilities RWE, EPH and Enel that had the biggest deficit of EUAs for 2016 at 139.7 mt, 79.1 mt and 61.7 mt. About the free allocation, RWE received 2.1 million EUAs for free, EPH 3.2 million and Enel got no free allocation.

Market Data

EUA DEC-17:

Date                      Open     High       Low       Last

12.06.2017          5.03        5.10       4.91       4.93

13.06.2017          4.95        5.03       4.91       5.02

14.06.2017          5.03        5.06       4.90       4.95

15.06.2017          4.95        4.97       4.90       4.96

16.06.2017          4.94        4.99       4.88       4.89

EUA AUCTIONS:

Date                      Country               Price      Volume                Ratio

12.06.2017               EU                    5.03     4 261 500           2.74

13.06.2017               EU                    4.99       4 261 500            2.77

14.06.2017               UK                    4.99       4 857 000            2.62

15.06.2017          HOLIDAY                            

16.06.2017          NO AUCTION