Spot NZUs traded in low volumes in a NZ$6.80-6.95 range again this week as traders await news on potential rule changes.

The spot allowances closed Friday at NZ$6.90, two cents down on the previous week and with few traders expecting the situation will change until the government provides a clearer signal of what the upcoming NZ ETS review might bring.

Foresters continue to offer small amounts of NZUs above NZ$7, while emitters show little interest in paying above NZ$6.90.

“It’s still quite well bid and buyers have interest. The offer at $7 is starting to thin suggesting we may be poised for a move higher soon,” brokers OM Financial said.

But government data released Thursday showed the surplus of industrial NZUs in the already long market ballooned by another 4.2 million last year – more than a quarter of total annual demand from non-forestry participants – indicating the demand side might be happy to stay on the fence for a while yet unless the government tightens up some of the scheme rules.

By Stian Reklev – stian@carbon-pulse.com

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