Spot NZUs fell 5 NZ cents over the week to close Friday at NZ$6.70 ($4.61) as traders reassessed the price level after the steep price hike earlier in the month.

The spot contract traded in a narrow NZ$6.70-6.85 range throughout the week on low volumes, with buyers unwilling to engage much in a market that was 20% lower only three weeks ago.

“We are drifting slightly lower here and it would not surprise to hit $6.50,” brokers OM Financial said, but added that “the next significant move is likely to be up as we move further through the emission year”.

Meanwhile, the government continues to be quiet about its post-2020 climate pledge, despite almost 40 nations having already submitted plans to the UN.

New Zealand is expected to announce its future carbon target next month, and the content of the INDC is set to influence which changes, if any, the government will make to the carbon market after the ETS review later in the year.

By Stian Reklev – stian@carbon-pulse.com