Spot NZUs traded in a NZ$6.80-7.00 range throughout the week and eventually closed at NZ$6.85 ($4.51), down 2.1% on last week, as market participants were unwilling to take new positions without news on the upcoming ETS review.

The front-year contract traded in low volumes as most sellers held out for prices above NZ$7, but buyers were unwilling to follow, traders said.

“Everyone is waiting for the ETS review and emitters have enough on,” one broker told Carbon Pulse.

“The price is holding up. It will eventually break higher, but it’s very stable at the moment,” he said.

The government is expected to begin the ETS review soon, and traders hope the terms of reference for the review may give some indications as to what they can expect from it.

But the review is unlikely to be finalised until after the UN climate meeting in Paris in December, and any changes to scheme regulations are expected to be introduced gradually.

By Stian Reklev – stian@carbon-pulse.com

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