The period between March 6th and March 10th was positive for EUA prices, with an increase of 8.27%. The market saw only bullish sessions, recovering the losses from the first week of the month. The triple digit still represented an area of resistance for EUAs and the DEC23 contract struggled to consolidate above this level. On Tuesday, March 7th, EUAs surpassed the 20-day moving average, below which they had stayed for a few sessions. The first support for prices was at 96.80 €/tonne. The first resistance was found at the historical record prices of 101.25 €/tonne.
Opening the second week of the month, during the morning of Monday, March 13th, prices yet again decreased, weakened by the overseas worries related to the Silicon Valley Bank situation. However, prices bounced during the first hours of the session on the 20-day moving average. The market heavily felt the worries on international exchanges, among the default of SVB and the collapse of Credit Suisse. EUAs lost over 12% on a weekly basis, going back to trade at the levels seen at the end of January and completely erasing the price gains of the last two months. With lows at 86.01 €/tonne on DEC23, Friday, March 17th, saw quotations yet again below the 100-day moving average and slightly above the 200-day moving average. The weekly trading range was very wide: over 14 € between the weekly highs at 100.16 €/tonne on Monday, before the start of the fall. During the course of the week, all the most important supports were broken; on Tuesday, the one at 92 €, on Thursday the one at 89 € and the following Monday, March 20th, the one at 86 €.
During the rest of the third week of the month, DEC23 EUAs struck a shy overall +0.41%. Prices during the week moved upwards until Friday, March 24th, when new worries related to Deutsche Bank re-awakened fears of the financial markets. Weekly highs were indeed reached during the first hours of Friday at 94.14 €/tonne, but already from the late morning, DEC23 slipped downward, leaving on the ground 4.93 €/tonne on a daily basis, the absolute highest loss since August 30th.
The last week of the month saw a market that recovered after the depreciations caused by worries on international financial markets. On a weekly basis, DEC23 EUAs gained 4.88% on Friday, March 31st. At the end of the week, EUAs stabilized above 90 €/tonne, earning on average a little less than 1 €/tonne per session. Weekly highs were reached on Friday, very close to 93 €/tonne (92.90) and above the resistance at 92 €/tonne.
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”.