NZUs continue to climb

Friday 9 Jul 2021

The price of NZUs have increased by more than 24% since the beginning of last month – hitting $46 on both the Commtrade and Carbon Match platforms mid-week. At the beginning of June NZUs were trading for $37 on the secondary market – up from around $24 in May of last year.

At $46 NZUs are fast approaching the $50 trigger point that would see up to 7 million extra units released under the Cost Containment Reserve at the next NZU auction in September. The Climate Change Commission recommended that the cap be lifted to $70 as soon as practical in its final advice to the Government. A spokesperson for Minister for Climate Change James Shaw says no decision on when the cap will be lifted has yet been made.

In its weekly newsletter, Carbon Match said NZU holders seemed to have little appetite for selling. It reported that sellers who had sold prior to last month’s NZU auction had expressed regret at having sold below the auction’s clearing price of $41.70. Meanwhile the market has steamed on, with buyers paying asking prices, and sellers pulling back or lifting their asking prices.

Some natural sellers point to the strength of the log market, with many forest owners telling us they're not under pressure to sell NZUs right now anyway. And for those that are in the market to sell, the much higher carbon price has seen budgeted NZU volumes get scaled back in response.

Carbon Match, Carbon News

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