This newsletter was published 3.8.2022 at 20:22pm CEST

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

First week of reduced auction supply has caused a steady price increase in EUA prices. As usual, auctions get halved for the whole month of August and in previous years we have seen a similar pattern of slow rise in prices. The negative correlation with gas, that was in effect for weeks, has turned around and all energy prices are moving in tandem this week. Power prices are printing all-time highs in almost every region, followed by gas and EUAs that still have some room to go. Latter is up by around 10% this week and closing in on the 85 EUR/EUA level, that started the sell-off towards 75 EUR two weeks ago. With Fed delivering a second consecutive 75 bps hike last week, equity markets took it as a less hawkish statement than previously anticipated, resulting in further strengthening of equity prices across the board. Index S&P 500 is now trading close to the levels last seen in early June. Markets everywhere are rising at the moment but it is yet to be seen if this is only a bear market bounce, or we will see lower prices in the months to come still.

German power prices are up by 32 EUR since last week, with the front year contract trading at 405 EUR/MWh. API2 coal prices are down by 27 USD since last week, with the Cal23 contract trading at 263 USD/tonne. EUR/USD is up by 30 points since last week and is currently trading 1.0150.

Price development of EUA Dec2022 futures contract