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This newsletter was published 24.2.2021 at 19:18pm CEST
The current prices on the European carbon market are as follows:
EUA prices are on an upwards path again. After a short-term pullback where prices briefly reached levels around 36.50 EUR/EUA on Monday, market recovered and participants are eyeing record values above 40 EUR/EUA again. Strength of the market was accompanied by power and coal prices rise as well. It seems that the bullish trend is still intact and optimism will continue. Moves in options market data confirm this with calls seeing the most activity in the last week. Total call open interest on all strikes and maturities on ICE has increased by around 13 million EUAs. Puts saw an increase in open interest as well but the change was not as high at 8 million EUAs. As the market moved higher participants were decreasing in the money call open interest, with volume moving into higher strikes, mostly at 40 EUR/EUA. Steadily dominating call options open interest increase has pushed put call ratio of open interest down to 0.75. This is a rather bullish signal and confirms that higher prices are here to stay, at least for a few more months, while compliance buying interest is helping to put a continuous bid on the market.
German power prices are up 1.15 EUR/MWh since last week, with the front year contract trading at 53.15 EUR/MWh. API2 coal prices are up 4.60 USD since last week, with the Cal22 contract trading at 68.60 USD/tonne. EUR/USD is up 110 points since last week and is currently trading at 1.2140.