The recent bull run in New Zealand’s emissions trading scheme ran out of steam this week as spot NZUs shed 0.9%, but prices held above NZ$11 and observers eyed further gains ahead.

Spot NZUs traded in a narrow NZ$11-11.10 range over the week and closed Thursday at NZ$11.10 ($7.44), a 10-cent drop compared to last week.

Volumes returned to normal levels around 100k-150k after breaching a million last week, though this week was cut short by a day due to the upcoming Easter break.

“We may see some consolidation here as we near the [Mar. 31] return date for emitters. It’s common for things to quieten down between now and the surrender date of May 31,” brokers OM Financial said in an emailed market comment.

“However use any consolidation or correction as an opportunity to buy; in our view this is simply a pause before we head much higher. We see little to no momentum to send this market lower.”

Climate Change Minister Paula Bennett last week helped push the price above the NZ$11 mark when she said it was only a matter of time before the 2-for-1 rule would be abolished, but the government has yet to make a formal announcement about the outcome of the ETS review.

By Stian Reklev – stian@carbon-pulse.com

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