EU Carbon Permits Are Fastest-Rising Commodity in June
European Union carbon permits, on track to be the world’s fastest-rising commodity in June, approached their highest in more than three months as the bloc unveiled a $149 billion growth plan for the region’s economy.
Allowances for December jumped as much as 29 cents to 8.28 euros ($10.40) a metric ton and were at 8.08 euros as of 10:10 a.m. on the ICE Futures Europe exchange in London. They’ve gained 27 percent this month. United Nations emission credits are ranked second-fastest for the month, rising 20 percent.
The two carbon benchmarks beat U.S. corn’s 19 percent increase, U.S. natural gas’s 15 percent advance and U.S. wheat’s 14 percent rise, according to price data for 80 commodities compiled by Bloomberg. The worst performer was gasoline traded in Singapore, which fell 14 percent. Brent crude oil traded on ICE has declined 8.5 percent.
“Carbon has continued to hold up in the face of weak energy markets and continuing concerns about the debt-laden euro zone,” Matthew Gray, an analyst in London at Jefferies Bache Ltd., said today in an e-mailed research note. “With regulatory intervention in sight, carbon has no reason to follow its traditional price-drivers with any real conviction.”
Carbon allowances jumped June 25 to their highest in more than three months in intraday trading as regulators in Brussels considered temporarily withholding supply sold in auctions in the three years starting next year. The bloc is seeking to fix an oversupply in the market, which otherwise will extend beyond 2020, according to a June 22 forecast by Trevor Sikorski, Barclays Plc’s analyst in London. Regulators have proposed to detail a plan by the end of next month.
UN emission credits for December gained 3 cents to 4.05 euros a ton as of 10:08 a.m. on ICE.
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