Carbon Weekly Newsletter

This newsletter was published 9.11.2022 at 16:12pm CEST

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

Persistent selling that occurred just after EUAs spiked above 80 EUR mark in late October, pushed market south by almost 10 EUR in just over a week. Pullbacks like these happen often, despite little change in underlying long-term fundamentals, and are as such more a consequence of short-term trading activity. Low liquidity could also be one of several reasons that might be contributing to sharper and bigger intraday moves as well, since relatively small quantities drive the market. Another reason that might have caused some selling activity could be well above average temperatures across the Central Europe. Consequently, energy demand is reduced and therefore demand for EUAs to offset the emissions. Participation on daily auctions has been high most of the and could be interpreted as bullish indicator, however the most recent two have offered some discount below prevailing spot prices. Even though prices were range bound for the better part of the week, slightly lower auction result might have sparked selling activity today. Average daily volumes are still low in comparison to last year. Other markets in European Energy complex have eased in the past week even more, as gas and power trade near July lows – almost 70 percent from yearly highs for German Calendar-23 power futures.

German power prices are down by 43.00 EUR since last week, with the front year contract trading at 329.00 EUR/MWh. API2 coal prices are down by 36.00 USD since last week, with the Cal23 contract trading at 175.00 USD/tonne. EUR/USD is up by 170 points since last week and is currently trading 1.0040.

Price development of EUA Dec2022 futures contract

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