This newsletter was published 28.10.2020 at 19:57pm CEST

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

EUA prices are still under pressure as market tests levels last seen in June. It seems that the only supportive factor at the moment are bullish forecasts for longer term while everything else is working against EUAs. Auctions have continuously cleared below the market recently. Energy and equity markets have been under pressure as the virus outlook keeps worsening. Since the downtrend in EUAs started in mid-September, prices have dropped by over 25%. There is still further room for a decrease and prices may approach close to 20 EUR/EUA where lies the biggest options open interest for December expiry. Options have seen increased interest in puts while calls decreased in October. As US election date approaches on November 2, we might see elevated volatility on equity markets which could translate to EUAs as well.

German power prices are down 1 EUR/MWh since last week, with the front year contract trading at 37.55 EUR/MWh. API2 coal prices are down 1.5 USD/tonne since last week, with the Cal21 contract trading at 57.50 USD/tonne. EUR/USD is down 120 points since last week and is currently trading at 1.1750.

Price development of EUA Dec2020 futures contract

Disclaimer:

In accordance with relevant legislation this communication is provided for informational purposes only and is not considered an investment research, financial analysis or other form of general recommendation relating to transactions in financial instruments. It is not an offer or a solicitation of an offer to buy or to sell any instruments or to participate in any trading strategy.

It is the responsibility of each interested party to make their own enquiries that the information provided is appropriate to their individual circumstances in addition to any legal, regulatory, tax or other implications for themselves or their business. The information is solely for your internal use and may not be issued as the basis of any product or reproduced, redistributed or transmitted in whole or in part in any form or by any means, electronic or mechanical, including photocopying or by any information storage or retrieval system without the prior express written consent of Belektron.