Market outlook
June 2025
The energy market was extremely unsettled in the second quarter of 2025 and was characterised by geopolitical news: The markets were influenced by the USA's unstable tariff policy, the war in Ukraine and hopes for tentative talks between the warring parties.
Electricity
The Cal 2026 Base in the electricity market has traded in a range of EUR 16.33/MWh in the second quarter to date - with a low of EUR 74.69/MWh and a high of EUR 91.04/MWh. The product is currently trading at the upper end of the range, primarily supported by fixed prices for emission allowances. The price discounts for the front-year base for 2027 (minus EUR 8/MWh) and 2028 (minus EUR 17/MWh) reflect the expectation that an improved supply situation due to renewable energies, improved infrastructure, especially storage facilities, and readily available fuels such as gas, LNG and coal will have a dampening effect on prices in the future.
Emission certificates
The price curve for European Union Allowances (EUAs) did not come to rest in the second quarter either. An enormous 15 euros lay between the lowest value of 60 EUR/tonne and the highest value of 75 EUR/tonne on 16 May. Since 7 May, the repeatedly tested support at the EUR 70 mark seems to be holding. The withdrawal of 276 million certificates from the ETS as part of the market stability reserve had been expected by analysts and apparently had no impact on the price. The current high prices are partly due to the higher electricity generation from conventional power plants in Q1 2025 and partly to the fact that EUAs correlate more strongly with the well-supported financial markets than other commodities. Undeterred by the geopolitical situation, the DAX rose by 5,836 points from the beginning of April to 24,325 points.
Gas
The gas market, which is usually the focus of attention, was not as nervous in Q2 as in Q1 2025. Even though there was a price movement of EUR 5/MWh for Cal 2026, geopolitical reports no longer affected this market as directly as in the past. Good LNG availability, reliable gas supplies from Norway and storage facilities filling up as planned limit the risk premium.
Coal
There was a price slide on the API2 coal market despite low inventory data (-23 % year-on-year). From a high of USD 114 per tonne at the beginning of April, the market slipped by USD 10 per tonne in the second quarter.
Outlook
Overall, the outlook is neutral. The market is now aware of the volatile policy from the USA and expectations of peace talks between Ukraine and Russia are low, meaning that the price impetus from news on this will no longer be so massive. In addition, any geopolitical risk premiums will be offset by weak economic data. The result is a neutral market environment with headline-driven price movements in a sideways price corridor.
However, one factor that is currently being closely monitored is the weather outlook for the coming summer. Some analyses show the risk of a dry, hot period. It is too early for strong price reactions after this, but the water balance in central-western Europe, which is currently below average in a long-term comparison, provides support. With this in mind, price increases are possible if the dry and hot summer forecasts are confirmed.
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