This newsletter was published 24.4.2024 at 16:24pm CEST

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

Just a week ago, EUAs briefly traded just shy of 75 EUR per tonne on the back of massive buying caused by rising gas and power prices. Today, six trading sessions later, EUAs transacted even below 65 EUR per tonne for the first time in two weeks. Carbon has returned to the level from which it violently broke to the upside and is currently finding significant support at this level. The 65 EUR mark has been an important level for quite some time, as it initially provided technical support, which then turned into resistance. The market is again testing this level as a structural support. Only time will tell if the level holds or falls. According to the CoT report, investment funds had decreased their net short exposure in the past week by roughly 20 percent, or more than 5 million tonnes, which could be the reason behind an amplified spike in prices. Markets in the European energy complex might be in a transitional period, exiting a bullish fundamental environment since colder weather is likely to dissipate. Precipitation in Central Europe has led to more hydro power generation; moreover, the Alps have large reserves of snow, and its melting could positively influence renewable power generation. Solar and especially wind power production have been lagging so far, which might be one of the reasons for the support seen in front-month TTF gas and German power futures during the last fortnight. Markets remain more sensitive to the upside, and any geopolitical conflict could cause panic buying, despite the bearish period theoretically lying ahead.

German power prices are down by 5.55 EUR since last week, with the front year contract trading at 87.25 EUR/MWh. API2 coal prices are down by 5.50 USD since last week, with the Cal-25 contract trading at 116.00 USD/tonne. Front year gas prices are down by 2.055 EUR since last week, with the TTF Cal-25 trading at 33.100 EUR/MWh. EUR/USD is up by 50 points since last week and is currently trading 1.0690.

Price development of EUA Dec2024 futures contract