This newsletter was published 7.7.2021 at 4:23pm CEST

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

Strong bullish momentum in EUAs was interrupted by rapid selling pressure which occurred on Tuesday afternoon. After the market reached new all-time high at 58.64 EUR last Thursday, it retraced slightly and consolidated around 57.50 EUR for a few days. The 10 percent drop from the record level, was accompanied by the highest daily trading volume since the 19th of May, plummeting prices of major energy commodities, electricity and some other global markets. December 2021 EUA contract hit the low at 52.20 EUR and closed the trading day at 52.90 EUR/EUA. Some analysts think that the whole move was caused by Natural Gas and Brent, however the retracements were much shallower in those two markets. The day after selloff, carbon prices recovered slightly and reverted just shy of 55 EUR. This might be interpreted as a signal that the market is lacking buyers who would be willing to continue purchasing EUAs at record levels. None on the auctions held in July cleared significantly below the secondary market, what made the Tuesday’s selloff even more difficult to anticipate. Today’s EUAA auction offered slight discount in comparison to the spot market since it cleared at 53.15 EUR. Even though we might experience some more sharp moves in the future, the market for now remains in long term uptrend.

German power prices are down by 1.45EUR since last week, with the front year contract trading at 71.15 EUR/MWh. API2 coal prices are down by 1.75 USD since last week, with the Cal22 contract trading at 85.75 USD/tonne. EUR/USD is down by 55 points since last week and is currently trading at 1.1800.

Price development of EUA Dec2021 futures contract