This newsletter was published 23.3.2022 at 17:32pm CEST

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

Past trading week was calm, with low intraday volatility and lower than usual volumes. The reason might be the first quarterly option expiry this year. March options settled today, at 2 p.m. CET. Even though the largest open interest for this expiry was at 90 EUR, the level was too far to reach. After several days and many unsuccessful attempts to break strong technical and psychological resistance at 80 EUR, sellers finally gave up on defending the level. EUAs shoot to 81.40 EUR yesterday in more or less a straight line and retraced after buying pressure discontinued. After today’s option expiry EUAs sold off heavily. Selling pressure might have been additionally amplified by the news of payment scheme for Russian gas in roubles. In contrast to EUAs, gas and power started trading higher right after the news, which may confirm lack of correlation between the markets. Auctions in the past week have been well covered, as there has been usually two times more bids than allocated allowances. Time window for compliance to submit EUAs is closing, since there is only a month left until deadline. Seasonal buying pressure might continue, however mixed fundamentals would suggest there is no clear direction in the mid-term and prices could go either way.

German power prices are up by 17.00 EUR since last week, with the front year contract trading at 173.00 EUR/MWh. API2 coal prices are up by 34.00 USD since last week, with the Cal23 contract trading at 198.00 USD/tonne. EUR/USD is unchanged since last week and is currently trading at 1.0990.

Price development of EUA Dec2022 futures contract