The EUA DEC24 price wrapped up the first week of March with a decline of 3.34%, influenced by a bearish trend stemming from speculative selling and macroeconomic uncertainties. This was further fueled by a significant sell-off in TTF and a prevailing sense of distrust across global equity markets. On Monday, the front-year contract price held steady at €71.55/ton. However, it took a sharp downturn on Tuesday, plummeting to €68.50/ton, which was accompanied by a notable surge in trading volumes. After a slight rebound on Wednesday, Thursday saw the market hit its weekly low at €66.84/ton, before bouncing back partially to €68.63/ton on Friday. The market had slipped into oversold territory, which made the late-week rebound somewhat anticipated from a technical standpoint. Nonetheless, other key indicators like the MACD and Stochastic had remained stagnant for weeks, offering little guidance regarding the future trend direction.
During the second week of March, the emissions allowance market witnessed a notable recovery, with the EUA DEC25 contract climbing steadily. From March 10th to the 14th, it marked a weekly increase of over 3%. The week kicked off on Monday the 10th with some uncertainty, ending at €69.01 per ton. However, the market exhibited limited volatility in the days that followed. On Tuesday, prices dipped slightly to €68.24 per ton, only to rebound to €69.62 per ton by Wednesday, buoyed by a more optimistic market sentiment.
The most significant upward movement happened midweek, fueled by reports of a potential linkage between the EU and UK emissions trading systems, as well as the possibility of Russian gas supplies returning to Europe. Last Thursday saw a peak price of €71.82 per ton, closing at €70.60, which indicated a resurgence in demand. On Friday, the market maintained its gains, finishing at €70.99 per ton, signaling a stabilization phase after the recent bullish trend.
Between March 17th and 21st, the EUA DEC25 market experienced a rollercoaster of price movements, ultimately closing on Friday the 21st at €71.45 per ton. This marked a drop from earlier weekly highs but still represented an overall gain of 0.65% for the week. On Monday, trading began with uncertainty, and prices closed lower at €70.11 per ton, with a modest volume of 20.05 million allowances changing hands. Tuesday brought a slight uptick, as prices climbed to €71.30 per ton, bolstered by increased trading activity totaling 31.66 million allowances. Wednesday saw a burst of bullish energy, with the contract soaring to a weekly peak of €74.23 per ton before settling at €73.44 per ton. This day also recorded the week’s highest trading volume at 35.88 million allowances. However, Thursday and Friday marked a market retreat, which wiped out some of the prior week’s gains. The market movements were heavily influenced by the upcoming March options expiry, with notable open interest at both €70 and €75 per ton, likely creating price barriers leading up to the expiry date on March 26th.
During the last week of the month, from the 24th to the 28th, the EUA DEC25 market experienced a significant downturn, closing on Friday at €68.80 per ton. This marked a steep drop from the beginning of the week, resulting in an overall decline of -3.71%. The week was largely dominated by persistent bearish sentiment, with prices especially faltering in the latter half. The most significant drop occurred on Thursday, March 27, when the EUA prices fell by €2.29 per ton. By Friday, they dipped further, hitting a low of €67.95 per ton, the lowest point since March 12. Ongoing uncertainties surrounding economic forecasts and climate policies continued to cast a shadow over the market, leaving investors apprehensive as they awaited clearer signs of recovery.
With his commodity trading experience, specializing in the energy sector, and extensive knowledge of European exchange platforms and Over-The-Counter markets, he brings his advanced analytical view on the EU ETS carbon market in a monthly short blog, “Let’s Talk Carbon”.