Spot NZUs rose steadily over the week to close Friday a NZ$6.45, up 3.7% on last week and their highest levels this year as new buyers stepped in to boost demand, traders said.

NZUs opened the week just below NZ$6.20 but moved up gradually throughout the week, with a little over 300,000 permits trading, according to brokers.

“There is a lot more bid interest but very few sellers, though they’re starting to emerge,” one market participant said.

The fresh demand reflected the overall trend of increasing interest in NZUs as emitters lost access to UN offsets from Jan. 1.

The government confirmed this week that the 2015 ETS review will start late in the year, meaning there is likely to be at least eight months until there is clarification on whether the government will respond to the UN cut-off by boosting NZU supply through auctions.

Brokers OM Financial noted some small forest-owners were increasing supply to take advantage of higher prices.

“But they are also aware prices are moving higher with some now looking to offer in the market waiting to be hit as opposed to hitting bids,” it said in a note to clients.

By Stian Reklev – stian@carbon-pulse.com