Carbon Weekly Newsletter

This newsletter was published 26.6.2024 at 22:31pm CEST

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

Since the options expiry last week, the market has been trending down again with sellers getting more aggressive by the day. Commitment of Traders data showed that funds have increased their short positions again. Currently, the net short is at 18.1 million EUAs, up by 4.5 million since last week. Gas has been falling as well, and with the gas-EUA correlation still high, it is unlikely for the trend to reverse quickly. June is now on par with January in the number of down days, which has reached 12 so far. Only six trading days have been positive, and of those, just one has closed higher than the previous day’s high. With the quarter end coming up, we might see continued selling in the next few days to test the important 65 EUR level. Summer months have normally been subdued in terms of EUA movement, so as we enter July and continue towards August, volatility could decrease. On the other hand, UKAs have been performing well, and funds are optimistic, with their long exposure increasing for many weeks now. While UKA performance in 2023 was very poor and the intense weakness continued until the end of January, things turned around when prices started to bottom out and have gained over 50% since then.

German power prices are down by 3.92 EUR since last week, with the front-year contract trading at 89.88 EUR/MWh. API2 coal prices are down by 6.95 USD since last week, with the Cal-25 contract trading at 117.05 USD/tonne. Front-year gas prices are up by 0.650 EUR since last week, with the TTF Cal-25 trading at 37.500 EUR/MWh. EUR/USD is down by 70 points since last week and is currently trading at 1.0680.

Price development of EUA Dec2024 futures contract

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