This newsletter was published 14.10.2020 at 16:14pm CEST

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

EUA prices have managed to move lower but hit a strong support at 25 EUR/EUA. A lot of selling volume hit the market in the recent days as the market is testing levels last seen in mid-August. This is the last critical level that bulls need to hold to have a chance at prices rebounding back towards 30 EUR/EUA into year end. However, if prices do not bounce in the next few days, further downside gets unlocked. Lower levels which could get touched in that scenario could extend down to 21 EUR/EUA. Of course, such a move would need a catalyst and help from other markets, as at the moment prices still look supported and correlated markets are holding up well. Auctions still remain well bid and there is little reason for emissions prices to reverse the trend from the last 2 quarters. Year started at prices just below 25 EUR/EUA and it appears that this level will play a major role until the end of the year.

German power prices are down 1.2 EUR/MWh since last week, with the front year contract trading at 40.20 EUR/MWh. API2 coal prices are down by 0.9 USD/tonne since last week, with the Cal21 contract trading at 59.00 USD/tonne. EUR/USD is unchanged since last week and is currently trading at 1.1760.

Price development of EUA Dec2020 futures contract

Disclaimer:

In accordance with relevant legislation this communication is provided for informational purposes only and is not considered an investment research, financial analysis or other form of general recommendation relating to transactions in financial instruments. It is not an offer or a solicitation of an offer to buy or to sell any instruments or to participate in any trading strategy.

It is the responsibility of each interested party to make their own enquiries that the information provided is appropriate to their individual circumstances in addition to any legal, regulatory, tax or other implications for themselves or their business. The information is solely for your internal use and may not be issued as the basis of any product or reproduced, redistributed or transmitted in whole or in part in any form or by any means, electronic or mechanical, including photocopying or by any information storage or retrieval system without the prior express written consent of Belektron.