The EUA super bull run of 2018 shows no signs of slowing down despite the odd high-volatility pricing event. Prices in late September were above 22 €/t, having started the year around 7 €/t. The high sustained carbon prices are supporting related markets, with TTF winter-delivery gas pr..
We had expected more pronounced market softness in the run-up to the expiry of Sep-18 EUA options on 19 September and forecast underlying EUAs to trade below 19 €/t given the balance in open interest between in-the-money calls and puts. The market traded just above the 20 €/t strike in..
Last week’s hyper volatility saw carbon close in a range between 18.9-25.2 €/t, with the first half of the week gapping upwards and the second half crashing back down. The upward trend coincided with a Financial Times article late the previous week (6 Sep) outlining how a raft of new p..
It was another surprisingly bullish week for EUAs. Market chatter focused on the longstanding-but-never-used rule that allows EU countries to introduce more supply into the EU ETS in the event of excessive upward price movement. The rule in question states that the European Commission is to conve..
EUA price increases in August, when primary supply was constrained, did not disappoint—the Dec-18 contract added 21% from the start to close of the month. The next few weeks should now see some downward moves from the over 21 €/t prices that have persisted over the last two weeks. We expect a cou..
Another four weeks of strong EUA price gains suggests that the proprietary longs still have an appetite for the trade. The drop in primary supply in August has helped. Power demand has provided some support for compliance buying, but strong hydro and solar generation in southern Europe has blunte..
Please note that due to the summer break the next edition of European carbon will be published on 3 September.For the third week in a row, EUA price direction largely came from the reduction in primary auction supply. Dec-18 EUAs added 1.2% w/w on reduced auction supply to close Friday at 17.89 €..
EUA price direction last week largely came from the reduction in primary auction supply amid an otherwise quiet week for European carbon. Dec-18 EUAs added 3.3% w/w on reduced auction supply to close Friday at 17.73 €/t. The options market retained its bias for call options, with total open..
The Q2 18 results season started last week, with EnBW reporting an acceleration in its power hedging both q/q and y/y for further-dated contracts. The biggest change was for its Y+2 (2020) hedging, which saw the midpoint of the reported hedging range jump by 20 percentage points (ppts) q/q and by..
The market rebounded over the last couple of weeks, clawing back losses after the run-up to the expiry of the Jun-18 options on ICE. Since the close on expiry day (19 June), the Dec-18 EUA contract has added back some 13%, moving back above 16 €/t for closing prices in mid-July. However, the..
Just when it seemed like EUAs were settling into a bit of a range, prices added another 1 €/t (6.3%) w/w last week to go above 17 €/t. The uptick occurred as consistent d/d increases over the week, suggesting that there was no one trigger event and that it was rather a case of the marke..
EUA prices managed to gain 2.3% w/w last week despite one weak auction result and a cancelled UK auction. But the most notable talking point was Brexit. The UK government published a policy paper outlining the country’s main negotiating goals with regards to leaving the EU. While not overly..
The carbon market now has little in the way of future policy initiatives still to be agreed, so the market is now being driven by trading positions of proprietary market participants and some supportive fundamentals. The supportive fundamentals are coming from the sustained period of hot and dry..
Much of H1 18 was very volatile for prices, but June ended with EUAs trending in a very narrow 0.27 €/t band around 15 €/t. This narrowness raises the question of whether the market has settled into a more stable place after the sharp price increases that have seen EUA values double sin..
June has seen a break in what had previously been a nearly relentless EUA bull run that has seen EUA prices more than double since January. The Dec-18 contract hit a close as high as 16.3 €/t on 29 May, but has softened in June to as low as 14.24 €/t on 19 June, before heading back to o..