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This newsletter was published 24.07.2024 at 16:54pm CEST
The current prices on the European carbon market are as follows:
EUAs have experienced a substantial surge in the past two days on healthy volume. The lack of daily auction, coupled with an increase in the net short exposure of speculative positioning, might have played a significant role in the rally. According to the weekly Commitment of Traders report, investment funds increased their bearish bets by more than 5 million tonnes week-on-week, reaching 23.4 million tonnes. The news that may have amplified the rally today came from the French TSO, which stated that RTE faces unprecedented constraints on their eastern borders due to historically high exports towards neighbouring bidding zones. Countries like Belgium, Italy, Germany, and Switzerland might need to buy power elsewhere or increase domestic power production. This could be the main reason for support in gas and power markets as well. The benchmark German power futures for the calendar year 2025 transacted above 90 EUR per MWh, up by more than 4 percent in just two trading days. Similarly, front-month TTF gas prices spiked towards 33 EUR per MWh, despite relatively full underground storage. These are currently sitting at 83.15 percent full, which is roughly the same level as in late July 2023. Auctions have consistently cleared at prevailing spot prices or at a premium to the secondary market; however, only yesterday did the strong auction trigger buying activity. Despite the summer, trading volumes and volatility remain healthy, which could already be due to the approaching compliance deadline at the end of September.
German power prices are down by 1.56 EUR since last week, with the front-year contract trading at 89.95 EUR/MWh. API2 coal prices are up by 2.75 USD since last week, with the Cal-25 contract trading at 115.00 USD/tonne. Front-year gas prices are up by 0.500 EUR since last week, with the TTF Cal-25 trading at 37.450 EUR/MWh. EUR/USD is down by 90 points since last week and is currently trading at 1.0850.
Price development of EUA Dec2024 futures contract