EUAs collapsed ahead of the benchmark contract expiry

The power spot prices for today averaged 359.34€/MWh in Germany, France, Belgium and the Netherlands, +20.38€/MWh from Friday and +91.20€/MWh week-on-week as the market was lifted by forecast of weaker French nuclear availability and a wind shortage.

The carbon prices plummeted by a massive 13.6% on Friday, eroding all December’s gains as traders took their profit ahead of the Dec.21 expiry and attempted to roll their positions to the Dec.22 while the benchmark contract breaking several technical supports triggered stop losses which strengthened the steep fall. Although impressive, the correction was expected by some participants as the market was seen as overbought since November and the recent sharp rally of prices was attributed mainly to option trading rather than fundamentals. The EUA Dec.21 contract eventually closed at 73.28€/t, -11.49€/t from Thursday’s settlement and -10.45€/t from the previous week.

The power forward prices were mixed on Friday, the French curve posting slight gains with likely support from the firmer gas prices while most of the German contracts edged down, possibly pressured by the collapsing EUAs.