This newsletter was published 31.03.2021 at 22:25pm CEST

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

EUA prices continue to range. Not much has changed since last week as other markets appear to be stuck in a range as well. Options activity was, as usual, in favour of calls. However, open interest has increased by the lowest amount in months. In total 10.5 million EUA in calls have been added, along with around 3.5 million EUA in puts. This goes hand in hand with decreased futures volume on the exchange and tight daily ranges. It appears that market has been in a waiting mode, focused on the upcoming release of preliminary 2020 emissions data, scheduled on Thursday around noon. Last year, analysts were expecting a decrease of over 10%, however more optimistic forecasts have formed since. If the numbers surprise to the upside, we might finally see a break to fresh highs at around 44 EUR/EUA. If the numbers will be in line with expectations, market will likely continue to range. In the event of a negative surprise, market may rapidly move towards the lower part of the range at 40 EUR/EUA, but dips will likely be bought, as they have been virtually since last November. Strength in the market is still prevailing and it is hard to imagine seeing much lower prices in the next few weeks.

German power prices are unchanged since last week, with the front year contract trading at 56.75 EUR/MWh. API2 coal prices are unchanged since last week, with the Cal22 contract trading at 72.25 USD/tonne. EUR/USD is down 100 points since last week and is currently trading at 1.1720.

Price development of EUA Dec2021 futures contract

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