Overview

The carbon market ended the week on a quieter note, with Dec-25 EUA futures spending most of Friday trading within a tight range, following a week of peaks and troughs. Whereas last week saw EUA futures rally from recent lows in the €69s back up to the mid €72s, this week saw almost daily bouncing between €71 and €73 as trader's risk appetites remained muted. Fundamental supply/demand data is still subdued post-summer, and energy markets are providing little impetus. Recent EUA auction results, however, have generally been at a premium to spot with strong bid-to-cover ratios showing solid interest, but the market continues to wait for some more definitive price signals and an expected increase in activity in September. For the meantime EUA prices remain well-anchored between €71 and €73 and show little sign of breaking out of that range.