EU Carbon Drops Most in Two Weeks After Breaching Support Level

European Union carbon permits fell the most in almost two weeks after prices breached a technical support level and the U.K. auctioned allowances.

The December futures contract declined as much as 7.3 percent to 3.30 euros ($4.27) a metric ton on London’s ICE Futures Europe exchange. Allowances closed at 3.32 euros a ton, the lowest for 10 days and the biggest decline since May 10.

The contract dropped below a trendline at 3.46 euros that started from the record-low 2.46 euros on April 17, according to Clive Lambert, an analyst in Billericay, England at FuturesTechs.com Ltd. The breach of support means prices may fall to as low as 2.86 euros a ton, Lambert said.

Aggregate daily trading volume for EU permits in May declined yesterday to the lowest since Jan. 22, according to ICE Futures data. The 20-day moving average for all contracts fell to 20.4 million tons.

The U.K. sold 4.1 million EU allowances at 3.43 euros a ton in a fortnightly auction. The sale had bids of 11.1 million tons, the most for a U.K. offer since Feb. 27, according to ICE data compiled by Bloomberg.

United Nations carbon offsets for December fell as much as 24 percent to 29 euro cents a ton, their lowest in almost three weeks, before closing 11 percent lower at 34 cents a ton.

To contact the reporter on this story: Alessandro Vitelli in London at avitelli1@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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