This newsletter was published 16.10.2024 at 17:36pm CEST

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

Carbon has encountered decent resistance at 66 EUR per tonne, following a more than 10 percent rise from 60 EUR for the December futures contract. The market achieved this significant gain in just four trading days, potentially driven by short covering by large participants. The Commitment of Traders report showed a slight decrease in the net short position, though funds still seem confident in their bearish bets, as there has been no notable change in sentiment. Fundamentally, the market remains stable. Underground gas storage levels are at their highest, with withdrawals remaining small to moderate in some countries. EUA auctions have, in most cases, cleared at a premium to the secondary market, usually signalling strength. At the moment, the carbon market seems to be sending mixed signals, with bullish sentiment among investors and bearish sentiment among energy companies. Additionally, the increasing share of renewable energy in the power mix has been lowering demand for EUAs, which could explain the persistent bearish trend. However, despite these factors, the bearish narrative could quickly shift in the event of geopolitical escalations or unfavourable weather conditions.

German power prices are up by 1.96 EUR since last week, with the front-year contract trading at 86.50 EUR/MWh. API2 coal prices are down by 0.90 USD since last week, with the Cal-25 contract trading at 123.60 USD/tonne. Front-year gas prices are up by 0.375 EUR since last week, with the TTF Cal-25 trading at 38.730 EUR/MWh. EUR/USD is down by 70 points since last week and is currently trading at 1.0880.

Price development of EUA Dec2024 futures contract