Carbon Weekly Newsletter

This newsletter was published 28.2.2024 at 16:41pm CEST

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

Last week ended on a very bearish note as EUAs traded at a 31-month low, prices last seen in April 2021. Selling pressure prevailed, most likely due to downtrending power and gas prices, as well as the increased net short position held by investment funds. According to the weekly CoT report, net short exposure increased to a record 39.1 million tonnes, which makes the market even more sensitive to upward moves. The market has been approaching 50 EUR per tonne; however, sellers encountered strong demand at such low prices and quickly started to revert their positions. The trading day on Monday ended strongly; however, the major moves to the upside happened yesterday and today. The market tested local highs several times; however, persistent buying took out all the sellers, and EUAs broke out of a technical range at around 55 EUR per tonne. Strong follow-through happened today as well after a strong auction clear. The cover ratio greater than a factor of 2 was a strong enough catalyst to trigger buying after the auction and propelled prices to new local high that sits at 58.88 EUR per EUA. The front-year German power future also experienced a 10 percent surge in the last week, despite bearish fundamentals. Winter is almost over, while underground gas storages are sitting at a healthy 63 percent capacity, which is slightly more in comparison to the same date last year.

German power prices are up by 6.20 EUR since last week, with the front year contract trading at 76.50 EUR/MWh. API2 coal prices are up by 11.50 USD since last week, with the Cal-25 contract trading at 103.50 USD/tonne. Front year gas prices are up by 1.225 EUR since last week, with the TTF Cal-25 trading at 30.000 EUR/MWh. EUR/USD is up by 30 points since last week and is currently trading 1.0840.

Price development of EUA Dec2024 futures contract

 

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