Spot NZUs fell 0.3% over the week to close Friday at NZ$9.47 ($6.34), as buyers and sellers were both unwilling to cede ground before more is known about the outcome of the government’s ETS review.
The spot contract moved within a tight NZ$9.45-9.55 range throughout the week, and ended Friday bid at NZ$9.40 and offered at NZ$9.55.
The market now seems set to remain near current levels until traders get more certainty on the ETS review outcome, especially in regards to whether the 2-for-1 rule will be removed as expected.
“We are so close to the submissions being due and buyers are really looking for more certainty before they show any more presence on the buy side,” one market participant told Carbon Pulse.
The market is still digesting recent price rises, as NZUs were trading around NZ$6.50 last September.
“Over the next 2-3 months the carbon market may consolidate around these levels as submissions under ETS changes come in and the government decides its next course of action,” said brokers OM Financial.
“We recommend buying dips and reiterate our expectation that the price of carbon will rise above $10.00 soon after this consolidation period.”
By Stian Reklev – firstname.lastname@example.org