In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Jan 15-19 delivery hovered in a tight range from the previous week in both East Japan and West Japan. The temperatures in morning and night hours were getting lower to typical levels for the mid-winter period, but day time was not so chilly partly due to mild winter. In addition, the weather was sunny mostly during the week except in North Japan and the Japan Sea side, a factor that put a lid on day time prices. Besides that, a softness in fuel prices led by gas also weighed on spot power prices.

In Tokyo and Kansai, the key areas in East Japan and West Japan, the 24-hour average posted a difference in favor of the East by Yen 1.39 for Jan 15 delivery, Yen 1.13 for Jan 16 delivery, Yen 1.12 for Jan 17 delivery, Yen 0.84 for Jan 18 delivery and Yen 1.95 for Jan 19 delivery.

In the fuel markets, LNG and coal prices softened from the previous week while crude oil prices turned higher.

DES Northeast Asia spot LNG prices hovered in the mid $9 level per mmBtu for prompt February 2024 arrival as of the latter half of the week (Jan 18), down slightly less than $1 from the end of the previous week (Jan 11). The LNG market was pressured by ample spot availability in Northeast Asia, coupled with a continued downward trend in European natural gas prices. The Ministry of Economy, Trade and Industry (METI) announced on Jan 17 that Japan's LNG inventories for power generation stood at 2.58 mil mt as of Jan 14, up 70,000mt from the previous week. The level exceeded 2.39 mil mt as of end-January last year and the average of past five years at 1.91 mil mt.

FOB Newcastle thermal coal prices in Australia hovered in the high $122 level per ton for February 2024 loading as of the latter half of the week. The level was down nearly $5 from the end of the previous week. Coal prices were pushed lower by slowing demand amid mild winter together with a weaker LNG market.

In the crude oil market, WTI crude for February 2024 stood in the high $73 level as of afternoon on Jan 19 while Brent crude for March 2024 was trading in the high $78 level. Both WTI and Brent were up about $1 from the end of the previous week. Crude prices were buoyed by unabated tensions in the Middle East, on top of a larger-than-expected drawdown in US crude oil inventories.

The actual highest price during the week was at Yen 17.05 in seven areas from Tokyo to Kyushu as well as the System Price (SP) for Jan 17 delivery. Meanwhile, the actual lowest price during the week was at Yen 4.65 in SP for Jan 17 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 9.99 in Hokkaido, down Yen 0.38 from the previous week, Yen 9.97 in Tohoku, down Yen 0.38, Yen 11.47 in Tokyo, up Yen 0.36, Yen 11.03 in Chubu, up Yen 0.14, 10.40 in Hokuriku, down Yen 0.29, Yen 10.19 in Kansai and Chugoku, down Yen 0.33, Yen 10.18 in Shikoku, down Yen 0.34, and Yen 10.19 in Kyushu, down Yen 0.21.

In the JEPX auction, volumes of offers were 1,135.41 mil kWh on a weekly average basis, up 5.8% from the previous week. Meanwhile, bids on a weekly average basis grew by 1.9% to 858.66 mil kWh. The weekly average of trade volumes increased by 2.0% to 708.44 mil kWh.

Power demand in nine areas of Japan during Jan 15-19 was a combined 13,791.79 mil kWh, up 0.9% from 13,675.46 mil kWh Jan 8-12. The figure was down 0.6% from the corresponding period a year earlier. Demand during Jan 16-20, 2023 after day of week adjustment was 13,869.49 mil kWh.

In the JEPX forward market, no deals were confirmed during Jan 15-19.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Jan 15-19 were as below.

Deals reported on EEX (European Energy Exchange) during Jan 15-19 were as below.

In the fourth week of January, spot power prices are expected to rise from the third week. The temperatures are forecast to be lower, so that a pickup in heating demand will likely impact the price trends. But both power supply and fuel inventories are more than sufficient at this point. Any upside room in spot power prices is believed to be limited without a harsher-than-expected cold wave or a massive loss in power generation capacity.