This newsletter was published 31.07.2024 at 16:27pm CEST

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

Carbon emission allowances have reached the highest level in two weeks, as the market climbed to 69.50 EUR per EUA. The market is currently approaching major technical levels, specifically the 200-day and 50-day moving averages, which have throughout the year offered sellers opportunities to scale into positions. Despite the summer, average daily volumes remain healthy and unusually high for this time of the year. It is not uncommon for EUAs to breach 15 or even 20 thousand lots of volume on a given day for the December 2024 futures contract. The activity could indicate current buying and selling interest, especially due to the compliance deadline in two months. This could be fuelling the buy side, however increased auction volumes and bearish fundamentals could be the basis for longer-term short positioning by investment funds. Short-term fundamentals remain stable, with healthy renewable power generation and warm temperatures. Underground storages are already approaching 85 percent fullness, with Germany and Italy nearing almost 90 percent full. Despite relatively low LNG imports, gas storage levels continue to climb steadily, which might indicate lower demand than in previous years. In the coming months, there will be two EUA option expiries. One will be in August, marking the first time that ICE will hold an option expiry that is not a quarterly one. However, open interest is quite low compared to September’s.

German power prices are up by 3.87 EUR since last week, with the front-year contract trading at 93.82 EUR/MWh. API2 coal prices are up by 3.20 USD since last week, with the Cal-25 contract trading at 118.20 USD/tonne. Front-year gas prices are up by 1.490 EUR since last week, with the TTF Cal-25 trading at 38.940 EUR/MWh. EUR/USD is down by 10 points since last week and is currently trading at 1.0840.

Price development of EUA Dec2024 futures contract