This newsletter was published 11.10.2023 at 18:23pm CEST

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

The prices of EUAs have recently shown renewed strength, bouncing back from an attempt to dip below 80 EUR/EUA, which ultimately failed. One of the primary factors driving this resurgence can be attributed to the gas market’s sharp reaction to the news of an escalation of conflict in the Middle East. Furthermore, market reacted to the discovery of a gas pipeline leak between Finland and Estonia on Sunday. The pipeline is expected to remain offline until April. The net short position of investment funds has also increased since the previous week, by approximately 4 million EUAs, now totalling 22 million EUAs. This is adding bullish short-term momentum to the prices as the unexpected events caused some short covering. Market activity has been notably above average throughout this week. However, this trend is likely to change in the next day or two, as a carbon conference is underway in London, attracting many traders. A sign of reduced participation was already evident in today’s auction, which cleared almost 1 EUR below the secondary market. Looking ahead, over the next few weeks, the current upward movement may reverse, and the downtrend could resume. This is because, apart from sporadic news events, there seems to be limited support for prices to make significant upward moves.

German power prices are up by 11.00 EUR since last week, with the front year contract trading at 128.00 EUR/MWh. API2 coal prices are up by 10.00 USD since last week, with the Cal-24 contract trading at 128.00 USD/tonne. Front year gas prices are up by 1.20 EUR since last week, with the TTF Cal-24 trading at 46.20 EUR/MWh. EUR/USD is up by 115 points since last week and is currently trading at 1.0615.

Price development of EUA Dec2023 futures contract