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This newsletter was published 25.03.2021 at 18:49pm CEST
The current prices on the European carbon market are as follows:
EUAs are caught in a range near all-time highs. Prices reached new records close to 44 EUR/EUA last Thursday but have backed down since. It appears that strength is still there and dips are bought quickly. However, the pace of the bull market has slowed on basically all markets in the last two weeks and it might be another week or two before we get another bigger move. This is perfectly normal with moves of this size as EUA added over 30% to the price only in 2021. Prices covered a range of over 7 EUR/EUA solely in March. Consolidation after such big moves usually last up to a month. Still, with compliance deadline rapidly approaching in 5 weeks, buying pressure might intensify in this period. Further optimism came from the options market as it showed an increase in bullish bets since last week. 20 million EUA calls got added to total open interest, while puts added another 5 million EUAs. This brings the total call open interest at 330 million EUAs, while puts contribute another 213 million EUAs. Most activity was seen in calls higher up, starting at 50 EUR, increasing at 55 EUR and reaching the biggest volume of over 6 million EUAs at 75 strike, shows ICE data on all maturities. Sentiment adjustment to higher asset prices is setting in and it seems like it is only a matter of time when further gains will be seen across the board.
German power prices are unchanged since last week, with the front year contract trading at 56.50 EUR/MWh. API2 coal prices are up 1 USD/tonne since last week, with the Cal22 contract trading at 72.25 USD/tonne. EUR/USD is down 80 points since last week and is currently trading at 1.1820.
Price development of EUA Dec2021 futures contract