The market slightly recovered from March’s last quotations at the beginning of the month. Prices rose by 2,04% from Friday, April 1st. April 7th was the most bullish session, as it brought back prices above the 20-day moving average and again over 80 €/tonne. EUAs are moving in a narrow range, which was noticed from the Bollinger bands with a channel of approximately 5 € wide. Market operators waited to see developments of the Ukrainian conflict and its effects in the medium-long term. The low liquidity of the exchange was shown during the first week of April, with an average daily exchange of 17 million EUAs, which is almost half of the average liquidity in March (32 million).
In the second week of the month, EUAs remained flat and traded around 79 €/tonne. Due to the Easter holiday, the ICE exchange was closed on Friday 15th and Monday 18th.
During April’s third week, the market starts Wednesday with a bang (+7,62 €/tonne) and closes the week with further price gains. Compared with Thursday 14th, the DEC22 EUAs strike a remarkable +14,91%, with prices exchanged above 89 €/tonne with a slight increase in liquidity. Prices were sustained by the last minute compliance purchasers, who drove prices higher until the opening gap from the 28th February was filled.
At the end of the month, prices closed at -5,10%, a physiological retracement after the 15% jump during the Easter week. EUA DEC22 ended Friday above 82 €/tonne, the primary support for prices represented by the convergence of the 20, 50, and 100-day moving averages. The examined period appeared bearish in its first half and recovered towards the end of the week, with the lowest prices reached on Wednesday (the DEC22 shortly slips below 79 €/tonne).
It is interesting to study the correlation with power prices this month: the rise in prices of EUAs drove also an increase in Germany’s baseload price during the month, which marked a +7,53%, extremely close to the 7,59% price rise shown on EUAs.
Francesco Rogato
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”.