United Nations greenhouse-gas credits and European Union carbon permits were the world’s two fastest-falling commodities in July, amid concern that EU regulators may struggle to cut oversupply in the bloc’s market.
United Nations Certified Emission Reduction credits for December dropped 33 percent during the month. They were up 8.5 percent at 2.82 euros ($3.47) a metric ton today after closing yesterday at a record 2.60 euros. EU carbon for December dropped 16 percent this month, the second worst of 80 commodities tracked by Bloomberg. Lean hog futures in Chicago were the third-worst performer with a drop of 15 percent.
EU carbon may drop further because of probable delays to a proposal that would temporarily withhold permits sold at auctions planned for the next three years, Bloomberg New Energy Finance analyst Konrad Hanschmidt said yesterday. The contract was the best-performing commodity in June, rising 30 percent.
“The market sentiment changed from one that was optimistic about the supply-delay proposal to one that is pessimistic,” Matthew Gray, an analyst at Jefferies Bache Ltd. in London, said today in a phone interview.
EU carbon allowances for December jumped 5.2 percent to close at 6.93 euros a ton on the ICE Futures Europe exchange in London. German power, U.K. natural gas and European coal all advanced.