EUAs temporary eased on Thursday after spiking above 55€/t the previous day

The European power spot prices rebounded yesterday, supported by forecasts of weak wind production, below-normal temperatures and an increased power demand compared to the Ascension Day. Prices reached 71.81€/MWh on average in Germany, France, Belgium and the Netherlands, +0.07€/MWh day-on-day.

The EUAs sky-rocketed to a new high above 55€/t on Wednesday as the carbon market was lifted by further speculative buying, soaring gas prices and a very strong auction result as traders stocked allowances ahead of the 4-day holiday break in primary sales. The carbon prices corrected on Thursday, driven down by profit taking, a weaker energy complex and dropping equities, but rebounded in the afternoon and eroded most of their early losses.

The European Commission published the Total Number of Allowances in Circulation late on Wednesday. The TNAC, representing the surplus held by the carbon market participants at the end of 2020, hence amounts to 1 579 million allowances, +14% from the previous year mainly due to the sharp emissions reduction induce by the covid crisis and additional coal-to-gas switching observed last year. As a consequence, the MSR will cut the auction volumes from September 2021 to August 2022 by 379mt.

The power curve prices tracked the spiking gas and carbon prices on Wednesday, but corrected along with the underlying gas contracts the next day, with likely additional pressure from their technically overbought conditions.

eua december contracts prices and traded volumes
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