Carbon Weekly Newsletter

This newsletter was published 15.5.2024 at 16:45pm CEST

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

Daily trading volumes have been decreasing since the beginning of May, and EUAs appear to have formed a new trading range. The December 2024 futures contract recently found strong support at 69 EUR per tonne, while activity remained subdued just a couple of euros higher. Moreover, the market respected and reacted to the 200-day moving average. According to the CoT report, investment funds continue to decrease their net short exposure by adding long positions. Despite two missing auctions on Thursday and Friday, the net short position had decreased by more than a million tonnes. Interestingly, open interest for June option expiry has begun to shift from the 40 EUR and 50 EUR strikes to those near the market price. Especially noteworthy is the 65 EUR strike, which has been gaining attention, with a combined open interest for the June expiry of nearly 20 million tonnes. Other markets in the European energy complex have been relatively supported during the past week. German power futures for calendar year 2025 found several willing buyers at 91 EUR per MWh, while front-month TTF gas futures continue to trade at around 30 EUR per MWh. There may be several reasons for the support in gas markets, with a potential factor being the heatwave in Thailand, indirectly affecting LNG prices globally. Gas storage injections are occurring at a fast pace which could be further supporting gas prices. Recent auctions have offered no substantial discounts or premiums compared to the secondary market; however, low cover ratios could suggest that aggressive buying has subsided to some extent.

German power prices are down by 1.60 EUR since last week, with the front year contract trading at 91.75 EUR/MWh. API2 coal prices are down by 1.75 USD since last week, with the Cal-25 contract trading at 111.25 USD/tonne. Front year gas prices are down by 0.075 EUR since last week, with the TTF Cal-25 trading at 35.325 EUR/MWh. EUR/USD is up by 100 points since last week and is currently trading 1.0850.

Price development of EUA Dec2024 futures contract


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