Carbon Weekly Newsletter

This newsletter was published 20.3.2024 at 17:05pm CEST

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

A week after the March quarterly expiry, the market remains relatively range bound. Prices have been trading around the 60 EUR level, with mixed signals from the market. Auctions have cleared around prevailing spot prices, indicating that supply and demand remain balanced. Unlike in the EU ETS, the compliance deadline period for UKAs is approaching. There has been some bullish pressure during the past week; however, prices retreated before the UK auction, clearing at a premium to the secondary market. Gas storage levels in the EU have consolidated at around 60 percent full, while in the UK, they remain at around 30 percent. Despite relatively full storage levels, gas remains supported for the front-month contract. Consequently, power prices are trading above 80 EUR per MWh for benchmark German power futures for calendar year 2025. According to CoT report, investment funds still hold most of the net short exposure. Week on-week they have decreased their position by roughly 4 million tonnes, however, they are still holding just over 29 million tonnes of net short exposure. With the calendar spring around the corner and consequently more solar power generation and warmer average temperatures, the market might face less pressure to the upside; however, short squeezes are still possible. On Monday, EUAs closed the trading day above the 50-day moving average for the first time in 2024, which could be a sign of buyers engaging in the market more aggressively for the first time this year.

German power prices are up by 7.8 EUR since last week, with the front year contract trading at 81.35 EUR/MWh. API2 coal prices are up by 5.25 USD since last week, with the Cal-25 contract trading at 110.50 USD/tonne. Front year gas prices are up by 2.320 EUR since last week, with the TTF Cal-25 trading at 31.225 EUR/MWh. EUR/USD is down by 90 points since last week and is currently trading 1.0850.

Price development of EUA Dec2024 futures contract


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