Spot NZUs closed at NZ$7.10 on Friday, up 5 NZ cents on last week and level with the highest price recorded this year as interest remained firm ahead of the upcoming ETS review.
The price moved in a tight NZ$7.00-7.10 throughout the week and closed at the high-end of that, although volumes dropped to around 150,000, around a third of last week, as most natural sellers are still hoping for prices to climb higher.
“It is driven by sentiment and buyers entering market to close out their 2015 emissions,” one source told Carbon Pulse.
Climate Change Minister Tim Groser’s confirmation last week that the ETS review will get underway this year has reassured traders, and underpinned expectations that some price containment policies, such as the 2-for-1 rule, might soon be gone.
Tighter market rules would spark fresh demand, allowing buyers to begin eating into some of the accumulated NZU surplus, although there is also a chance that the government might boost supply through a new auctioning mechanism.
By Stian Reklev – email@example.com
Not yet signed up to CP Daily? Subscribe to our free newsletter here