Spot NZUs closed 1.5% higher this week at NZ$6.90 ($4.71) after touching a two-month high of NZ$6.95 on Tuesday as fresh demand pushed the price higher.

The contract opened the week just above last Friday’s NZ$6.80 close and traded up to NZ$6.95 when there was insufficient supply to satisfy bids.

“The bid side of the market has firmed considerably while new offers are relatively scarce. Big sellers of NZUs are not active at these levels so if a big buy order comes in we are likely to head into the mid $7.00 range,” brokers OM Financial said.

But traders were unwilling to pursue NZUs all the way up to NZ$7. In the final three days of the week barely a single deal was reported, and what initially looked like a bullish week eventually petered out with NZ$6.90 as the midpoint between bid and offer.

“As is generally the case, it will take emitter buying to push NZUs higher. We cannot predict exactly when this will occur, but as we approach year end there is a good chance of decent buying taking place,” said OMF.

Meanwhile, the government remained silent on the ETS review, reinforcing market suspicions that it is likely to only begin after the December climate summit in Paris.

By Stian Reklev – stian@carbon-pulse.com

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