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GERMAN – Cal 19 hits EUR 50 amid fresh CO2 high

Power

27 Aug 2018 11:58

27 Aug 2018 11:58

(Montel) The front-year contract for German power rose to a fresh six-year high of EUR 50.15/MWh on Monday, buoyed by a rampant CO2 market and firmer coal prices.

Baseload for 2019 last traded at EUR 50.10/MWh, up EUR 1.08 over Friday’s close on the EEX and the highest level for a front year since August 2012.

“Bearing in mind that CO2 continues to go through the roof and coal is firm, too, [that the contract hit] EUR 50 is not really a big surprise,” said an Austrian trader.

The Dec 18 EUA contract soared to a fresh 10-year high of EUR 21.62/t on Monday, albeit amid thin liquidity due the bank holiday in the UK. The contract has gained more than EUR 3 – or 20% - over the past week.

European coal also firmed, with the front year API2 contract hitting USD 91.10/t, up USD 0.82 day on day, on Ice Futures. Traders also highlighted strong gas prices, which they attributed to maintenance outages and demand to refill depleted storage.

However, EUR 50/MWh for power was a strong resistance level, traders agreed.

“I think we will fight over the EUR 50 [mark] for a few days. But if we actually sustain this level, I don’t see why it wouldn’t go higher,” said a German trader.

Front month at 7-year high
Further in, German power for September rose EUR 1.52 on the EEX to EUR 58/MWh, further extending a seven-year high based on a rolling front-month basis. October and November contracts also traded higher.

“We are seeing spot [prices] actually delivering at these levels,” said the German trader.

Low French nuclear availability – which has fallen to 57% amid several maintenance outages and output curbs due to high water temperatures in the Rhone river. In addition, warm weather and a lack of wind continued to support spot prices, he added.

German baseload spot auctions for August have averaged at EUR 55.61/MWh to date, with Tuesday delivering at EUR 66.07/MWh for baseload and EUR 70.03/MWh for peak on Epex Spot, up EUR 20.05 and EUR 18.44 respectively day on day.

Average wind power output will plunge some 17 GW day on day to 5 GW, or around 4 GW below normal, according to data from Energy Quantified (EQ), a Montel company.

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