This newsletter was published 29.9.2021 at 18:10pm CEST

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

A few days after quarterly option expiry EUA prices skyrocketed to all-time high at 65.77 EUR. It seems that history from the June’s quarterly option expiry has repeated itself, since the explosive move to the upside happened just two days after option settlement. However, a few hours after printing new all-time high, EUAs sold off sharply. Even though there was no major news published, price fell by more than 4 percent. Power and gas prices seem to have decoupled from EUA as they both reached new records today while EUA is still 3 EUR lower. Auctions have been a signal for weakened market with two of them barely reaching the minimum required volume this week. On the other hand, trading volumes on secondary markets have been growing, with more than 27 million EUAs averaged over 20 days for Dec21 contract. All of this points to indecision about the direction of EUAs, especially when rest of the complex is showing extreme strength. Larger price deviations to the downside may be limited as we enter the last quarter and colder weather could spark further buying.

German power prices are up by 19.25 EUR since last week, with the front year contract trading at 123.25 EUR/MWh. API2 coal prices are up by 23.50 USD since last week, with the Cal22 contract trading at 149.50 USD/tonne. EUR/USD is down by 120 points since last week and is currently trading at 1.1610.

Price development of EUA Dec2021 futures contract