Spot NZUs fell 2.2% over the week to close Friday at NZ$6.70 ($4.22), their lowest levels in 11 weeks, with more potential downside ahead, according to market participants.

The spot contract opened the week at NZ$6.85, but drifted after that and traded in small volumes on CommTrade at NZ$6.70 on Friday.

“The market is looking a touch weaker now,” brokers OM Financial said, but added that any dip below NZ$6.50 would be supported by procurement.

Traders are still awaiting news on the upcoming ETS review, and until the government releases information on the scope of the review, demand is expected to remain weak and the market likely to continue lacking direction.

Meanwhile, Prime Minister John Key this week came under pressure at the Pacific Islands Forum, where Pacific leaders urged Australia and New Zealand to increase their post-2020 climate change ambition.

However, Key and his Australian counterpart Tony Abbott dismissed the calls, saying their announced targets were ambitious.

By Stian Reklev – stian@carbon-pulse.com

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