Spot NZUs closed Friday at NZ$6.07 ($4.61), unchanged from last week as a lack of direction left traders free to focus on preparing for the May 31 surrender date.

Around 200,000 NZUs changed hands over the week in the NZ$5.95-6.10 range, with the spot contract eventually closing at the same level as last Friday.

“Buyers seem to be losing confidence in the spot, it feels a little uncertain at the moment. I don’t think the price will plummet but it seems to be a little bit of volume out there weighing the market down,” one observer said.

The government has yet to begin a consultation process for its future emission target under a Paris deal, and has not made any statements about its intentions with the ETS review due later this year, leaving the market without any regulatory direction.

“There will be a whole new ball game in a month’s time. I have the sense it will pick up again but for now the market is legless. People are covered,” the observer said.

Emitters are busy preparing for May 31, when they must hand over permits to the government to cover for last year’s emissions.

“We have seen a bit of last minute ERU buying, which suggests to me people are looking back at 2014 rather than at what they need now,” one broker said.

By Stian Reklev – stian@carbon-pulse.com