Carbon Weekly Newsletter

This newsletter was published 17.11.2021 at 16:21pm CEST

The current prices on the European carbon market are as follows:

Emission allowances broke out of consolidation, after several weeks of closing below 60 EUR. Violent expansion to new all-time highs was accompanied by above average volume, however not unusually high as seen at previous such instances. Price of EUAs has more than doubled in 2021 alone and trend is likely to remain up. Current trading environment seems to be one-sided, with limited supply, fuelled by option activity and rising gas prices. The only steady supply remain daily auctions, which have been cleared at or slightly above secondary market. This could be interpreted as a strong bullish sign, confirmed by rallies following the auctions. High cover ratio might also suggest there is a lot of interest by utilities and other installations, especially due to expanding economy and ever-increasing energy consumption. Front month TTF gas price increased by more than 40 percent in the last week, as consequence of tight worldwide gas supply. Even though Russian imports have increased and are in line with expectations, the main question remains Nord Stream 2 pipeline. German regulator has, at least for now, suspended the NS2 certification procedure and caused additional uncertainty about the pipeline starting date. With quarterly option expiry in a month and winter around the corner, trending European energy complex might accelerate to the upside, especially if energy crunch continues.

German power prices are up by 25.15 EUR since last week, with the front year contract trading at 136.00 EUR/MWh. API2 coal prices are up by 9.30 USD since last week, with the Cal22 contract trading at 113.30 USD/tonne. EUR/USD is down by 210 points since last week and is currently trading at 1.1305.

Price development of EUA Dec2021 futures contract

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