Carbon Weekly Newsletter

This newsletter was published 17.4.2024 at 17:13pm CEST

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

EUAs surged significantly during the past week and on the back of robust power demand and rising gas prices. Front month TTF breached strong a psychological level at 30 EUR and transacted as high as 33.950 EUR per MWh for the May 2024 futures contract. Similarly, EUAs have been going up by the day and yesterday the market briefly eyed 75 EUR mark for December futures contract, a price level last seen in early January. Despite one-sided rally that had begun two weeks ago, the market sharply reverted today. Sellers were not particularly aggressive; however, the bid side of the market was empty. It all resulted in a big swing to the downside, to around 70 EUR per EUA. The whole move to the upside has been gradual, despite significant uptick in trading volume. Two days in a row even surpassed 40 million tonnes in the December 2024 futures contract, excluding block trades. Open interest for June option expiry is still the highest at the strikes below current market price. 50 EUR strike holds the largest open interest of nearly 19 million EUAs, followed by the 40 EUR strike with open interest of just over 14 million EUAs. It seems that the market lately ignores CoT data which has been unchanged for several weeks. Auctions have, in all instances, cleared near prevailing spot prices, offering no substantial discounts or premiums, which indicated there is a balance between supply and demand. In contrast to EUAs, UK emission allowances have experienced less volatility, despite compliance deadline for 2023 emissions in less than two weeks. Market usually found significant support around 35 GBP for December 2024 futures contract, while aggressive sellers stepped in above 37.50 GBP per UKA.

German power prices are up by 8.50 EUR since last week, with the front year contract trading at 92.80 EUR/MWh. API2 coal prices are up by 4.00 USD since last week, with the Cal-25 contract trading at 121.50 USD/tonne. Front year gas prices are up by 2.355 EUR since last week, with the TTF Cal-25 trading at 35.155 EUR/MWh. EUR/USD is down by 100 points since last week and is currently trading 1.0640.

Price development of EUA Dec2024 futures contract

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