Spot NZUs fell 22 NZ cents to NZ$6.30 ($4.83) this week as buyers showed little appetite for picking up domestic permits just weeks ahead of the annual surrender deadline which most emitters will meet using UN offsets.

NZUs traded in a tight NZ$6.50-6.60 range for most of the week, but slipped to a six-week low on Friday as the bid side on online trading platform CommTrade pulled back as far as NZ$6.10, aided by one big seller stepping in to the market.

“There is a clear lack of interest from many buyers at present and a few sellers are starting to appear looking for bids,” brokers OM Financial said in a note to clients.

“Therefore we may dip to the low $6’s or even high $5’s,” it added.

Traders said their focus was on May 31, when they must hand over permits to the government to cover for their 2014 emissions.

They will comply with their targets under the ETS using UN-issued offsets, for the last time, meaning there is no real short-term demand for New Zealand units, even though a steady stream of supply – mostly from foresters – has appeared the last two or three weeks.

By Stian Reklev – stian@carbon-pulse.com