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This newsletter was published 28.6.2023 at 16:17pm CEST
The current prices on the European carbon market are as follows:
EUAs are still heavily affected by any gas or power related news. From the highs of just above 95 EUR seen moments before June option expiry, market found a way below 90 EUR. EUAs are currently trading in a range between 87 and 89 EUR per tonne, recently with more bearish bias. This could be due to reduced longs and the end of short squeeze. Net exposure of investment funds came down from short 25 million to net 1 million EUAs long in only two weeks. Another bearish reason might be revised auction calendar. Scheduled volume for EU auctions will be increased in July, from previously 2.409.000 tonnes to 2.658.000 tonnes. Even though it seems like a marginal change, the combined weekly volumes will be increased by roughly 750.000 EUAs. Despite the news auctions cleared premium to secondary market, which might be unusual. One of the largest discrepancies was observed on Friday, June 23, when auction cleared more than 1 EUR prevailing spot prices. Even though the result caused an upward pressure in prices, secondary market did not reach auction price. This might confirm relative bearish sentiment in carbon markets. Average daily trading volumes have been in decline as well, since mid-June, suggesting summer markets are just around the corner, along with lower liquidity and more random spikes in volatility.
German power prices are down by 8.55 EUR since last week, with the front year contract trading at 139.50 EUR/MWh. API2 coal prices are down by 0.25 USD since last week, with the Cal-24 contract trading at 117.25 USD/tonne. Front year gas prices are down by 3.560 EUR since last week, with the TTF Cal-24 trading at 50.250 EUR/MWh. EUR/USD is unchanged since last week and is currently trading 1.0930.
Price development of EUA Dec2023 futures contract