Carbon Weekly Newsletter

This newsletter was published 17.07.2024 at 15:52pm CEST

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

Summer markets are in full swing, and EUAs have not been prone to the much lower volatility that we have been accustomed to for the better part of the year. Average daily ranges of more than 2 EUR per day have been halved; however, liquidity remains healthy. Fundamentals remain stable, with slightly bearish tendencies. German power futures for the calendar year 2025 remain trading below 90 EUR per MWh, which could be due to healthy renewable power generation and more than 80 percent full gas storages, despite the heatwave affecting energy consumption in some parts of Europe. This factor has impacted EUAs the most as well, which could explain the current price action. Week-on-week Commitment of Traders reports showed little change, with bears still in control of speculative positioning. Daily auctions have offered no surprises either, with most clearing just below or just above the secondary market, aligning with the range-bound market. More interesting activity has been coming from the options side. The largest open interest is at the 65 EUR strike, but some healthy exposure can be observed at strikes well above current prices. The 90 EUR level is the second largest strike of all for the September 2024 expiry, with 13.65 million EUAs of open interest, while the 100 EUR strike holds more than 9 million EUAs of open interest.

German power prices are down by 0.32 EUR since last week, with the front-year contract trading at 88.39 EUR/MWh. API2 coal prices are up by 2.75 USD since last week, with the Cal-25 contract trading at 112.25 USD/tonne. Front-year gas prices are up by 0.950 EUR since last week, with the TTF Cal-25 trading at 36.950 EUR/MWh. EUR/USD is up by 120 points since last week and is currently trading at 1.0940.

Price development of EUA Dec2024 futures contract

 

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