This newsletter was published 21.6.2023 at 16:26pm CEST

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

Many trading participants have experienced a true rollercoaster ride in the past days and hours, just before today’s June option expiry. Even though the settlement window appeared very uneventful, daily trading range extended from 90.75 to 95.40 EUR per tonne. Such moves could be contributed to several factors, most obvious being option expiry and partially to CoT report, as well. It suggested that investment funds minimised their exposure from 20 million net short to around 1.7 million net short EUAs and the squeeze might finally be over. The figure was published just before daily auction, which pushed market south. Orderbook appeared empty and in only a few minutes plummeted from 95 EUR per tonne to just above 91 EUR. Such volatile drop might also be the reason why auction cleared below secondary market. Other markets in European energy complex have been affected by rise in volatility as well, especially gas. Prolonged maintenance of Norwegian pipeline has caused a spike in prices, of both gas and power. Front month TTF rose by more than 60 percent, providing support in power. Benchmark German power futures is still anchored around 150 EUR per MWh and spot power prices in CWE have not eased yet. Given the current situation, markets could correct to the downside with change in fundamentals, that is much more renewable power production and lower temperatures.

German power prices are down by 4.70 EUR since last week, with the front year contract trading at 148.05 EUR/MWh.API2 coal prices are up by 1.50 USD since last week, with the Cal-24 contract trading at 117.50 USD/tonne. Front year gas prices are down by 0.190 EUR since last week, with the TTF Cal-24 trading at 53.810 EUR/MWh. EUR/USD is up by 90 points since last week and is currently trading 1.0930.

Price development of EUA Dec2023 futures contract