The CO2 Market 11.03.2019

The EUA market traded last week within the range of 22.04-23.17 Euro/EUA.
The bullish sentiment that designed the market in the last few weeks is slowing down.

From the one hand, Brexit concerns are starting to enter into consideration in particular now that a no-deal Brexit is taking shape for the next future. In particular, the compliance deadline for UK operators has been anticipated to the end of this week, 15 of March 2019, and it is very likely that most of the operators have already purchased the units they needed for next Friday deadline.

In terms of bearish sentiment, we can also say that must-run capacity from gas-fired combined heat and power (CHP) and increasing coal-to-gas fuel switching has put German power sector gas burn on track to exceed coal-fired generation this week for the first time for any week, without at least one public holiday so far this decade. Moreover, with coal-fired generation likely to reach a decade low for a working week, there has been ample larger barge availability at Amsterdam-Rotterdam-Antwerp (ARA), even with Rhine levels rising and barge rates falling in recent days — suggesting coal-fired plant stocks are amply filled.

In this scenario, we do not expect a strong bullish market for next week, but a market range between 21.50 and 23 Euro/EUA.

At present time, the EUA is traded 22.37 Euro/EUA.

Source: AitherCO2, London