Carbon Weekly Newsletter

This newsletter was published 22.4.2020 at 9:24pm CEST

EUA market appears to be very resilient and buying pressure has been surprising. The current prices on the European carbon market are as follows:

EUAs have managed to recover losses from last week. The market appears very resilient and buying pressure has been surprising. As there are only 6 days until the compliance deadline to submit the allowances for verified emissions, majority of the companies have already completed their purchases for the year. The recent demand that we have seen must therefore be coming from other sources such as speculators. It is difficult to predict the direction of the next price move as market environment is changing so quickly and news can influence intraday direction. It would still be reasonable to predict that prices will start heading lower, only based from the auction supply and decreased demand from power producers who are generating much less in the current environment. On the other hand, market keeps making higher highs which is usually a sign of a bullish market, so signals are mixed, which will likely result in a range-bound trading. Free EUA allocation has almost been completed with countries handing out more than 95% of the planned allocation. The average is mostly skewed down by UK, which still has to allocate a quarter of the allowances, but most other countries are at or very near 100% completion

German power prices are up 1.20 EUR/MWh since last week, with the front year contract trading at 37.80 EUR/MWh. API2 coal prices have moved down by 0.50 USD/tonne since last week, with the Cal21 contract trading at 53.60 USD/tonne. EUR/USD is down 100 points and is currently trading at 1.0830.

Price development of EUA Dec2020 futures contract
Yours sincerely,
Jan Kresnik 
Carbon Trader

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