London, 4 February 2011

EUAs traded sideways early on Friday, as traders awaited spot dealing on Bluenext. The Paris-based bourse reopened its platform at 0700 GMT following a 14-day suspension after installing a new filter to screen stolen EUAs. Some market watchers welcomed the move, which was announced after the market closed on Thursday, but said it may take time for dealing to resume as new procedures were followed.

The commission shut down all European carbon registries on 19 January after at least 3.1 million carbon credits had been stolen from several accounts.

The EU executive said Thursday that the French registry could reopen Friday, along with the registries of Germany, the Netherlands, Slovakia and the UK, after giving assurances that security measures were in place.

By 0850 GMT, the Bluenext spot EUA was bid and offered at €14.36 and €14.46 respectively, although no trades had been made over the first 110 minutes of the session.

“I think it may take some time, perhaps by this afternoon, before we see people trading the spot,” said one trader, adding that he expected the spot contract to be valued at a discount of around 31 cents to the front-year EUA future.

“The announcement was only made last night and there are some new procedures to go through,” he said, adding that Bluenext’s efforts to filter out ill-gotten carbon units were welcome news.

Leipzig-based European Energy Exchange said that normal spot trading could also resume on its platform after Germany’s registry reopened. Spot trade on EEX had been technically possible throughout the suspension because of the platform’s method of holding deliveries of carbon units, though dealing was hampered over the period. The bourse’s clearing operator, European Commodity Clearing AG, said it would monitor transactions from Germany’s registry and reserved the right to reject suspect carbon units.

Futures flat

Meanwhile, the ICE ECX December 2011 EUA contract, which has traded normally throughout the EU’s two-week registry suspension, was pegged at €14.72, one cent below its close on Thursday. Around 1 million of the benchmark allowances changed hands over the first 110 minutes of trade.

“Things are pretty quiet,” a second trader added. “Although we have levelled off after yesterday’s fall.” On Thursday, the front-year allowance plunged from a 10-week intraday high of €15.14 to record its biggest daily drop in over three weeks.

Some traders said the price had dropped in anticipation of a sell-off by industrial participants, who would normally sell their surplus EUAs on the spot market but had been prevented by the suspension of all EU registries.

The volatile market saw Thursday’s turnover boosted to its highest daily level since 16 December, with around 27.6 million EUAs changing hands.

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