This newsletter was published 23.9.2020 at 18:43pm CEST

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

EUA prices are caught in an extended range between 26 and 30 EUR/EUA while volatility picks up. Today the quarterly option expiry took place which historically led to periods of increased volatility. This time was no different as we saw big moves unfold every day of this week so far. Even though ranges between daily highs and lows were already above normal, intraday movement was very erratic with market switching direction constantly in zig-zag moves. As we near the bottom of the trading range, possible future path now points to higher prices. Auction supply that will put 300 million EUA on the market in the last 4 months of the year has been well bid so far. We have not seen any extreme discounts and prices are still trading in the range that was established in July. That is signal of strength and until we see prices close below 26 EUR/EUA with conviction, we will see dips being bought and prices trend up, albeit coupled with high volatility.

German power prices are down 1 EUR/MWh since last week, with the front year contract trading at 41.00 EUR/MWh. API2 coal prices are up by 0.75 USD/tonne since last week, with the Cal21 contract trading at 59.50 USD/tonne. EUR/USD is down by 150 points since last week and is currently trading at 1.1680.

Price development of EUA Dec2020 futures contract

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