Spot NZUs traded at NZ$7.30 on Tuesday morning, their highest levels since Apr. 2012, as the price went through the NZ$7.10 ceiling of recent weeks on steady demand, before eventually settling at NZ$7.20.

Brokers OM Financial reported that 45,000 NZUs traded at NZ$7.30, after the contract had closed untraded at NZ$7.07 the previous day. The NZUs closed at NZ$20, the highest daily closing price since Apr. 26, 2012.

“This market looks set to stage a decisive move higher now – demand has picked up while sellers are few and far between,” OMF said in a note to clients.

The price has hovered at or near year-high levels the past two weeks as emitters reportedly have stepped into the market to pick up allowances ahead of year-end.

Comments from Cabinet ministers that the ETS will be strengthened in the upcoming ETS review have also contributed to the bullish trend, as expectations grow that some of the price containment regulations will be removed, which is likely to push prices up in the longer term.

“The market is now $7.10/7.35 – 10k is on the bid and 20k is on the offer. With a break to the topside we expect the market to come to life,” OMF wrote.

By Stian Reklev – stian@carbon-pulse.com

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