This newsletter was published 24.1.2024 at 17:34pm CEST

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

This week has witnessed quite robust bullish trend for EUAs, as priced advanced by more than 4 EUR in just three trading days. The rally appears to be primarily fuelled by short covering, recovering gas and power prices, as well as increase in industrial buying. According to weekly Commitment of Traders (CoT) report, investment funds increased their net short exposure yet again, now reaching almost 34 million tonnes. Additionally, several analysts have revised their 2024 carbon price targets, aligning with the forecasts made by funds several months ago, which is materialising today. It seems that market has found quite some support at 61 EUR and is strong enough to settle above 65 EUR per EUA today as well. Confidence that mild winter will prevail, and gas storages will be relatively full going into spring is still present. Considering the fact EUAs are down by 20 percent in only three weeks might imply that market could be oversold and is momentarily more sensitive to the upside. There are also some short-term risks associated with the weather, especially polar vortex in February and less wind power generation. If those risks materialise, carbon could be a bit more supported in the coming days. Daily auctions have in all instances, but one, cleared near prices on secondary market, which is not supporting bearish nor bullish thesis.

German power prices are up by 2.71 EUR since last week, with the front year contract trading at 82.91 EUR/MWh. API2 coal prices are down by 7.30 USD since last week, with the Cal-25 contract trading at 94.45 USD/tonne. Front year gas prices are up by 1.750 EUR since last week, with the TTF Cal-25 trading at 33.150 EUR/MWh. EUR/USD is up by 40 points since last week and is currently trading 1.0900.

Price development of EUA Dec2024 futures contract