This newsletter was published 05.11.2024 at 16:56pm CEST

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

Carbon continues to trade in a downward trajectory, after encountering strong resistance above 67.50 EUR for the December 2024 futures contract. Despite a sharp rise in price followed by a pullback, investment funds reduced their net exposure by roughly a third, which may have come as a surprise. Typically, fund exposure and price movements have been aligned, so this divergence could be giving bears additional confidence. Moreover, underground gas storage across Europe has been more than 95% full for several weeks, with only occasional withdrawals. The easing of gas prices may also be linked to the recent re-election of Donald Trump as the 47th President of the United States. Markets might be anticipating a de-escalation of conflicts in both the Middle East, as well as Ukraine. EUAs reacted sharply to the downside today, when the voting results came in, with market opening with a gap down. Even the daily auction, despite lower selling volumes, cleared below the secondary market and offered nearly a 30-cent discount—the largest in almost a month. In contrast, UK emission allowances reacted more calmly, trading only 30 cents below yesterday’s settlement price at the time of writing this newsletter. UKAs remain a bullish position for some investment funds, with the net long position increasing again to over 10 million tonnes, according to the latest weekly CoT report.

German power prices are down by 1.81 EUR since last week, with the front-year contract trading at 86.20 EUR/MWh. API2 coal prices are down by 4.75 USD since last week, with the Cal-25 contract trading at 119.00 USD/tonne. Front-year gas prices are down by 0.950 EUR since last week, with the TTF Cal-25 trading at 39.100 EUR/MWh. EUR/USD is down by 130 points since last week and is currently trading at 1.0730.

Price development of EUA Dec2024 futures contract