Euro Markets: EUAs record biggest weekly drop in two months as liquidity drains from the market
European carbon prices fell back on Friday morning in very thin trading activity as the third quarter approached its end, while energy markets also weakened as mild weather and high gas stocks continued to weigh on the markets.
Read MoreEuro Markets: EUAs snap three-day losing streak as carbon-gas price correlation increases
European carbon prices climbed moderately in choppy Thursday trade, underpinned by a strengthening link to gas prices as well as a second strong auction in a row, as participants continued to speculate over investment funds’ likely positioning in the coming days, while energy markets were firmer amid gas supply interruptions in the North Sea.
Read MoreEuro Markets: EUAs drift as positioning data shows small decrease in funds’ bearish bets
European carbon prices were slightly weaker on Wednesday as traders absorbed Commitment of Traders data that showed a small decrease in the net short position of investment funds, with several participants questioning whether this would be enough of a change to trigger another short squeeze.
Read MoreShift in EU ETS supply-demand balance prompts bank to slash 2023-2030 price forecasts
A sharp drop in forecast emissions in the EU ETS out to 2030 compared to pre-Covid forecasts, together with the expected additional supply of allowances to be released under the REPowerEU policy, has led a large bank to slash its EUA price forecast by 11% for 2023, with larger reductions in its predictions in subsequent years out to 2027.
Read MoreEuro Markets: EUAs drop most in three months as gas prices slide 9.3% after options expiry
European carbon prices dropped by the most in more than three months on Tuesday as weaker gas prices improved the fuel’s profitability in power generation and cut implied demand for EUAs, while TTF prices wiped out Monday’s gains after the expiry of the September options contract.
Read MoreEuro Markets: EUAs edge lower despite 12% jump in gas as supply outlook tightens
European carbon prices were marginally weaker at the close on Monday though the market appeared to be sustained by a strong gas market, where speculation is growing that storages may not reach tank tops before the coming winter, leaving room for additional demand.
Read MoreEuro Markets: EUAs follow gas gains to three-week high while UK carbon snaps three-week fall
EU carbon permits posted their biggest weekly increase in two months on Friday, as prices gained momentum from the combination of a moderate short squeeze and a sharp rise in natural gas prices, while UK Allowance prices ended 14 successive days of declines with a strong bounce-back.
Read MoreEuro Markets: EUAs post sharp gain amid strong auction and gas support as UKAs continue to fall
EU carbon prices posted robust gains on Thursday after a strong auction outcome triggered steady buying and firmer gas prices lent support, while UK Allowances slid to yet another record low as traders fretted about bearish political signals and speculated over whether UKA prices were set to test an auction reserve price.
Read MoreCBAM to add up to 56% to imported cost of steel from India and China by 2034 –report
The cost of importing steel into the EU from India and China could rise by 49% and 56% respectively when the EU’s carbon border adjustment mechanism is fully implemented by 2034, analysts estimated in a report published on Thursday.
Read MoreEuro Markets: EUAs rally after COT and options expiry as UKAs slump to less than 50% of EU price
European carbon rallied sharply in the afternoon after the expiry of the quarterly options contract triggered modest buying and amid an increase in investment funds’ net short positioning that encouraged a further short squeeze attempt, while UK Allowances slumped after a weak auction, with prices now at less than half the level of their EU counterpart.
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