EUAs fell below 55€/t in technical sell-off

The European power spot prices continued to drop yesterday and fell below the clean coal costs, driven down by lower clean fuels costs, the surging wind output, a weakening power demand and forecasts of stronger solar generation in Germany. The day-ahead prices hence averaged 84.33€/MWh in Germany, France, Belgium and the Netherlands, -76.09€/MWh day-on-day and should pursue their downtrend today as the wind generation is expected to reach its highest level of the week tomorrow.

The EUAs collapsed by 6.85% on Tuesday in a sell-off mostly induced by the Dec.21 contract breaking below several strong technical supports. The carbon prices started the day by extending Monday’s retracement and opened below their long-term upward trend that had been supporting the prices since November 2019. A rather good auction result temporarily stopped the downward move and the emissions prices managed to climb back above 58€/t by midday. The recovery was however short-lived and the EUA began to fall back early in the afternoon despite mostly supportive fundamentals, progressively breaking several technical supports and hence triggering stop losses which fueled the drop. The downward move even accelerated when the Dec.21 benchmark contract fell below its 100-day moving average, dropping as low as 54.01€/t, a level not seen since mid-August. Slightly rebounding at the end of the session, the EUA Dec.21 eventually closed at 54.55€/t, -4.01€/t from Monday’s settlement.

Pressured by the fading emissions, the power prices posted hefty losses along the curve.

Source : Refinitiv