This newsletter was published 23.10.2024 at 16:48pm CEST

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

EUAs rallied sharply today after gradually losing downward momentum over the past two trading days. The market surged, reversing five days of losses. It appears that carbon lacks the selling strength to dip below 60 EUR for the December 2024 futures contract. Strong support emerged at around 62 EUR per tonne before prices reached a high of 65.36 EUR per EUA. It is difficult to pinpoint the exact trigger for the rally, but many suspect aggressive short covering by investment funds. Although positions changed only marginally, according to the CoT report, the market dropped by more than €2.50 week-on-week, which would usually signal weakness. However, there have been some bullish indications also. Three consecutive daily auctions cleared at a premium to the secondary market, indicating some ongoing interest. Additionally, a lack of wind power generation may have contributed to rally in the power and gas markets, which subsequently boosted EUAs. While underground gas storage levels have remained high for some time, fundamentals may not fully support today’s rally. Warm weather and healthy hydropower generation continue to play a role in preventing power prices from rising too quickly. UKAs also showed some strength, with investment funds increasing their net long exposure in line with their thesis. The CoT report suggested that investment funds now hold a record long position of nearly 15 million tonnes.

German power prices are up by 2.90 EUR since last week, with the front-year contract trading at 89.50 EUR/MWh. API2 coal prices are down by 0.10 USD since last week, with the Cal-25 contract trading at 123.50 USD/tonne. Front-year gas prices are up by 2.020 EUR since last week, with the TTF Cal-25 trading at 40.750 EUR/MWh. EUR/USD is down by 100 points since last week and is currently trading at 1.0780.

Price development of EUA Dec2024 futures contract