Carbon Weekly Newsletter

This newsletter was published 21.2.2024 at 16:34pm CEST

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

EUAs continue with a negative streak that has been persistently going on since beginning of the year. An abundant supply of energy and healthy power generation from renewables amplified the strength of the trend, which ultimately resulted in lowest carbon prices in the last two and a half years. The EUA December 2024 futures contract briefly traded even below 52 EUR per tonne, which has for now acted as a support. However, if bearish fundamentals prevail, there may be little reason for market to recover significantly. March 2024 option expiry is just four weeks away, however open interests for this quarter are quite low across the board. The largest strike is still at 80 EUR, although other strikes, like 65 EUR and 50 EUR, keep finding more and more interest. Week-on-week CoT position data remains roughly unchanged, which could be interpreted in a way that investment funds find the current price not advantageous enough to add to shorts, or good enough to start closing parts of the exposure. Current prices might be to some extent also relatively cheap since the market trades well below long-term moving averages and could attract some industrial buying, as well as long term investors. Current prices are also well below long-term targets set by analysts. From technical perspective, EUAs trade roughly 18 EUR below 200-day moving average, while a faster 50-day sits comfortably above 65 EUR level.

German power prices are down by 1.40 EUR since last week, with the front year contract trading at 70.30 EUR/MWh. API2 coal prices are up by 2.25 USD since last week, with the Cal-25 contract trading at 92.00 USD/tonne. Front year gas prices are up by 0.360 EUR since last week, with the TTF Cal-25 trading at 28.775 EUR/MWh. EUR/USD is up by 90 points since last week and is currently trading 1.0810.

Price development of EUA Dec2024 futures contract

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