Carbon Weekly Newsletter

This newsletter was published 27.3.2024 at 16:12pm CEST

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

Carbon has been holding steadily above 60 EUR per tonne for the past three days, as market participants continue to close out the short exposure that has been accumulating in the first two months of the year. The net short position of investment funds peaked on February 23, with close to 40 million tonnes according to CoT report and has been continuously decreasing since then. As of today, this exposure has almost halved which, which may have contributed to the price reversal from February lows. However, as we have entered the calendar spring, there may be a potential decrease in demand for EUAs compared to the winter. Heating season has almost come to an end and solar output is expected to increase in the coming months. Moreover, gas storage levels are sitting at healthy levels as well, providing some relief to energy complex. Additionally, compliance deadline for 2023 emissions has been postponed from April to September, which could momentarily reduce the buying activity. It has also been reported that year-on-year verified emissions fell for around 14 percent in 2023, which is a significant change. What has provided some signals of strength, are daily auctions, which have been lately clearing at a premium to secondary market. Participation on auctions has been quite persistent throughout the year as they clear at prevailing spot prices on average.

German power prices are unchanged since last week, with the front year contract trading at 81.35 EUR/MWh. API2 coal prices are up by 7.00 USD since last week, with the Cal-25 contract trading at 117.50 USD/tonne. Front year gas prices are up by 0.100 EUR since last week, with the TTF Cal-25 trading at 31.325 EUR/MWh. EUR/USD is down by 30 points since last week and is currently trading 1.0820.

Price development of EUA Dec2024 futures contract

 

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