Carbon Weekly Newsletter

This newsletter was published 30.3.2022 at 16:07pm CEST

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

At the start of the week EUAs rose by almost five percent in only a few trading hours. Move was fuelled by the news of European regulator finding no major market deficiencies. In their report, ESMA published that about half of positions in EUAs are held by compliance entities and commercial undertakings, while positions by investment institutions remain limited. It was also reported that regulators would be looking into possibilities of limiting maximum position size in the market. EUAs reacted in favour of bullish news and peaked just shy of 82 EUR, highest value since beginning of March. Move to the upside was, however, unsustainable and price drifted off in the afternoon. Currently EUAs trade in a range, with no clear direction. Although daily trading volumes are picking up, they are much lower in comparison to previous months. Lower-than-average volumes might be indicating uncertainty in other markets in European energy complex, as well. Buying interest on primary auctions is still very high and most of them have been clearing at premium in comparison to prevailing spot prices. This occurrence is usual for seasonal purchases and may last till end of April. This might be interpreted as price supporting piece of information, however it remains unknown how market will react after compliance period.

German power prices are up by 8.00 EUR since last week, with the front year contract trading at 181.00 EUR/MWh. API2 coal prices are down by 8.00 USD since last week, with the Cal23 contract trading at 190.00 USD/tonne. EUR/USD is up by 160 points since last week and is currently trading at 1.1150.

Price development of EUA Dec2022 futures contract

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