The Q1-25 spot price continues to struggle to meet pre-summer expectations and the forward market has now resigned to this lower level. The lower Q1 prices have led to the FY-25/26 forward prices also softening in the northern States.
The spot price for Q1-25 continues to behave in an orderly summer and therefore the risk premia embedded in the forward price of December 2024, is struggling to be maintained.
1.0 Highlights
1.1 Current Quarter Tracking
As the summer days roll-on, the quarter-to-date average spot price has largely forced the correction to the forward price and have now converged. This implies the market is not expecting March to deliver an outcome too different from the months of January and February. The chart below shows the average spot prices for each Q1 month since 2020, where it can be noted that March is usually (but not always), the lowest average month of the quarter.
