Spot NZUs slipped down to NZ$13.15 ($9.10) on Friday, a 2.2% drop week-on-week, as the market consolidated after the bull run earlier this month that saw the contract peak at NZ$13.50 on Apr. 13.

Fresh expectations of impending government changes to the ETS pushed the NZU price up by NZ$3 in the four weeks following Mar. 10 to the highest levels seen since Nov. 2011.

Over the past few days traders have been absorbing the recent moves, causing a drop in volumes as demand has disappeared for now.

Most emitters have bought the allowances they need ahead of the May 31 compliance deadline, and traders said the price is likely to remain near current levels until the government releases information about the outcome of the ETS review.

“We expect to hear announcements from the government around settings changes in late May around budget time. No guarantees on that either because getting information from any government department or official is like breaking the enigma code,” brokers OM Financial wrote in a market update.

The deadline for commenting on the second half of the review is Apr. 30. Submissions for comments on the 2-for-1 rule and the fixed price option closed in February.

By Stian Reklev – stian@carbon-pulse.com

Not yet signed up to CP Daily? Subscribe to our free newsletter here