This week’s outlook for the UK ETS is bullish.

UKAs continue to trade comfortably above the cost containment threshold, prices to be sustained on small difference to EUA price, supportive fundamentals.

The UKA auction on Wednesday is likely to sell out in spite of UKAs trading at £58.00 as UK utilities swapping EUA hedges to UKAs will be attracted by a small price differential between the two. High gas generation and low renewable and imports of power look likely to keep the market supported. Halfway through November and we are on course to trigger the cost containment mechanism in December.

  • UK ETS:
    • A UKA auction is scheduled for Wednesday. The price gap from EUA to UKA is now about 4.30. The next auction should attract buying interest from utilities swapping EUAs to UKAs on that basis. 
    • Lack of wind with strong gas power generation will keep UKAs supported.
    • UKAs continue to trade above the cost containment reserve threshold for December, which is £52.88. The month to date Dec21 futures closing price is £54.19.
    • Indicative Price offered: £58.00

 

For more details on market outlook & protecting against your carbon risk, please email or call +31 20 522 0292

See also our EU ETS market update here