This newsletter was published 31.1.2024 at 17:20pm CEST

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

Over the past week EUAs traded mostly in a range bound structure, as investment funds stopped adding to their shorts, according to CoT report. Market generally found support just above 61 EUR per tonne, while selling pressure emerged at about 65 EUR mark. The market dynamics seem to be influenced by a cautious response to colder weather forecasts in early February and anticipated reductions in power generation from renewable sources. Consequently, EUAs started trading sideways, while front month gas and power broke out of range and started trending to the upside. Longer-term trend in EUAs still appears to be bearish, with major daily moving averages sloping down. 200-day is still well above 80 EUR per tonne, while faster, 50-day just above 70 EUR. In contrast, UK emission allowances hit an all-time low, with the benchmark contract trading at 31.30 GBP a few days ago. In such situations, markets can become more susceptible to sharper relative corrections to the upside. Daily auctions have in all instances but two cleared near the prevailing spot prices, which might indicate that supply and demand remain fairly balanced. Option activity is momentarily quite subdued, however some strikes have gained some considerable open interest. The largest for the March option expiry are at 65 EUR strike with 7.43 million EUAs, followed by 50 EUR strike with 7.33 million EUAs of open interest.

German power prices are down by 1.21 EUR since last week, with the front year contract trading at 81.70 EUR/MWh. API2 coal prices are up by 1.80 USD since last week, with the Cal-25 contract trading at 96.25 USD/tonne. Front year gas prices are up by 0.350 EUR since last week, with the TTF Cal-25 trading at 33.500 EUR/MWh. EUR/USD is down by 40 points since last week and is currently trading 1.0860.

Price development of EUA Dec2024 futures contract