This newsletter was published 17.8.2022 at 16:05pm CEST

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

After another week of continuous buying, EUAs breached 90 EUR mark and traded as high as 95,48 EUR for front year contract. Seven consecutive bullish days are the cause that all-time-high is, at the moment, only a few percentage points away, as well as triple digits. Prices have not been this elevated since late February, just before war in Ukraine started and deepened European energy crisis. Even though gas storages across the Europe continue to fill relatively quickly, the main concern remains what could happen during the winter and at the beginning of next year, when reserves will be depleted. Reduced auction supply, drought, and low wind power production, coupled with low gas imports led to (near) record high prices of commodities in European energy complex. Countries are starting to re-ignite lignite and coal power plants which could be another factor contributing to current push. Despite large open interest at rounded prices, market found little to no resistance when climbing higher. This could be interpreted as strong short term bullish sign and big imbalance between sellers and buyers. However, elevated power, gas and EUA prices could have detrimental effect on real economy, industrials especially. Some have already started reducing their production or have completely stopped producing goods. This could lead to demand destruction, shortage of some commodities and inflation spikes in wide range of consumer products.

German power prices are up by 83.00 EUR since last week, with the front year contract trading at 513.00 EUR/MWh. API2 coal prices are up by 35.00 USD since last week, with the Cal23 contract trading at 299.00 USD/tonne. EUR/USD is down by 200 points since last week and is currently trading 1.0150.

Price development of EUA Dec2022 futures contract