Carbon Weekly Newsletter

This newsletter was published 14.6.2023 at 16:29pm CEST

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

EUAs experienced a significant surge in prices, reaching their highest price point in almost a month. The sudden increase might have been a consequence of aggressive move in natural gas prices, which rose more than 25 percent in only two trading days. The main reason might be extended outage of the Norwegian pipeline, which could result in significant reduction of supply. This caused widespread short covering in EUAs, gas and power as well. Market has been, due to bullish fundamentals and still massive short positioning of the financial funds, continuing the bullish streak, now with four green daily candles in a row. It seems almost surreal that only nine days ago EUAs traded just above 78 EUR per tonne and only a shift in bias caused such rally. EUAs are now firmly trading above 93 EUR per tonne, only a week before quarterly option expiry. Largest strike for June expiry is still at 90 EUR, with almost 8 million allowances of open interest, followed by strike at 85 EUR, with open interest just above 7 million allowances. A huge surge in prices was not only seen in EUAs but in benchmark German power Cal-24 power futures as well. The market has moved up more than 20 EUR, reaching more than 150 EUR per MWh, levels last seen in early May. It seems that markets remain very sensitive and even a period of relatively low prices might not be very long lasting, due to risk of gas supply, warm weather and unreliability of renewables.

German power prices are up by 28.75 EUR since last week, with the front year contract trading at 152.75 EUR/MWh. API2 coal prices are up by 10.50 USD since last week, with the Cal-24 contract trading at 116.00 USD/tonne. Front year gas prices are up by 11.005 EUR since last week, with the TTF Cal-24 trading at 54.000 EUR/MWh. EUR/USD is up by 130 points since last week and is currently trading 1.0840.

Price development of EUA Dec2023 futures contract

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