EUAs continued to retreat amid weaker energy prices

Expectations of weaker demand and slightly improved nuclear availability continue to weigh on the European power spot prices yesterday which eroded 2.60€/MWh to 47.13€/MWh on average in Germany, France, Belgium and the Netherlands.

The French power consumption dropped further by 4.23GW to reach 63.76GW on average. The country’s nuclear generation faded by 0.39GW to 44.24GW but should rise to around 44.80GW today. The German wind generation climbed by 9.19GW to 25.42GW but should start easing from today and over the upcoming days and reach 10GW by next Monday.

EUA prices fell throughout Wednesday, pressured by the weaker equities and energy complex amid mild temperatures curbing the power demand across Europe. Despite this third straight bearish session, some market participants stated that the carbon market could still post some gains in the upcoming sessions by finding support in dip buyers and the nearing April compliance deadline. The morning Polish auction cleared with a 0.11€/t discount to the secondary market and average 1.83 cover ratio. The EUA Dec.21 slightly rebounded mid-day but the move was short-lived and the carbon prices pursued their retreat in the afternoon to eventually settle at 38.09€/t with a hefty 0.77€/t daily loss. Meanwhile, the Commitment of Traders report for last week presented a 4.8mt weekly increase in the investment funds net long position. On the other hand, the companies with compliance obligations reduced their net long position by 24.4mt (-5.1%) to 450.5mt.

Pressured by the waning gas and emissions markets, the power prices posted moderate losses across the curve on Wednesday.