A wild downturn and extreme volatility in the EU ETS prices after the conflict between Russia and Ukraine started. At the beginning of the month a remarkable collapse hit EUA prices. During the first week of the month, EUA prices plunged and left on the ground 26,14% compared to Friday, February 24th. The front-year contract broke several fundamental supports, including the one at 86,00 €/tonne. The following session sets the new important support for prices at 55,00 €/tonne.
At the beginning of the second week, EUA prices dropped then recovered confirming the market volatility. The highest price levels were reached Friday afternoon at 78,00 €/tonne. During March’s third week the price recovery was extended with a slight gain of 2,77%. The front-year EUAs struggle to consolidate over the threshold at 80 €/tonne, although highs at 81,50 €/tonne were reached this week. EUA DEC-22 surpasses the 100- and 20-day moving averages, with a first important resistance represented by the 50-day moving average around 83,70 €/tonne. The market appears less volatile.
The last week of the month prices reached over 81 €/tonne on the front-year contract, however EUAs are still struggling to establish levels above 80 €/tonne. As the compliance deadline for 2021 is approaching, market operators are concerned about the evolution of the Russian-Ukrainian conflict. EUAs close last week unchanged, as the DEC-22 contract is moving inside a range within the 20- and 100-day moving averages. The market’s liquidity remains low and below the monthly average (-15%) with a little more than 27 million allowances traded on the front-year contract.
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”.