Friday, May 25, 2012

Carbon holds strong

Carbon holds relatively strong, trying to break out from the trend, which could possibly trigger Stop Losses. It receives support from still relatively cheap coal and stronger energy and Brent prices. However anything below 7.02 euro for Dec12 (Fibonacci resistance level) doesn't signal change of the trend. So far the price is rangebound between 6.63 - 7.02. Open interest built up in the last two weeks by some 6m units on Dec12 and 2m units on Dec13 (most likely power hedging).

EURUSD on its knees again and we believe if it wasn't for the attractive dark spread [energy price - coal price] (and the hanging possibility of the set-aside), carbon would be trading much lower.


Next week, there is a CarbonExpo conference in Cologne and we imagine the trading activity to be subdued, as many participants will attend. We will be there as well, feel free to stop by our stand and chat about the market and what we can do for you!

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