Spot NZUs closed at NZ$6.07 ($4.59) on Friday, a 3.7% drop week-on-week as lack of demand meant a third straight week of losses for the contract.

The spot contract opened the week at NZ$6.30 but drifted from there as buy interest remained absent, although traded volumes increased a little as the price came down.

Around 320,000 NZUs changed hands during the week, according to market participants.

“We may drift a little lower from here but we don’t see a lot of momentum to drive this market substantially lower as there are buyers who will accumulate for their requirements,” brokers OM Financial said.

Emitters have until the end of next month to hand over permits to the government to cover for their 2014 emissions, but as they can still use UN offsets for surrender this year, traders said NZU demand is likely to remain low in the near term.

Meanwhile, OM Financial also said it expected the ETS review to be carried out before the end of the year, but that it didn’t expect any surprises.

By Stian Reklev – stian@carbon-pulse.com