In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Jan 22-26 delivery gained ground from the previous week in both East Japan and West Japan, with the East-West gap flipping into a reverse pattern in favor of the West. The phenomenon apparently came as the temperatures dropped steeply in West Japan, together with unplanned shutdowns of thermal units and output reduction of nuclear reactors. J-POWER halted the 1,050MW No1 unit at its Tachibanawan coal-fired power station for a planned suspension at 9:21 hours on Jan 24 for a facility malfunction. Meanwhile, Kansai EPC on Jan 22 lowered output to 40% at the 826MW No1 PWR (Pressurized Water Reactor) at its Takahama nuclear power station due to a steam leakage from the entrance pipe of the water supply booster pump.

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 1.40 for Jan 22 delivery and Yen 0.18 for Jan 23 delivery. But the gap flipped into a reverse pattern in favor of the West by Yen 0.21 for Jan 24 delivery and Yen 0.56 for Jan 25 delivery. East Japan outperformed West Japan again by Yen 0.21 for Jan 26 delivery. The gap between three areas in East Japan and six areas in West Japan was even wider in favor of the West due to a remarkable weakness in Hokkaido and Tohoku.

In the fuel markets, LNG prices rose moderately from the previous week, but coal edged down. Crude oil was stronger.

DES Northeast Asia spot LNG prices hovered in the high $9 level per mmBtu for prompt March 2024 arrival as of the latter half of the week (Jan 25), up slightly by 30cts from the end of the previous week (Jan 19). Spot cargoes were well supplied in the Northeast Asia market, but a strength in European natural gas prices lifted LNG prices in Northeast Asia. The Ministry of Economy, Trade and Industry (METI) announced on Jan 24 that Japan's LNG inventories for power generation stood at 2.49 mil mt as of Jan 21, down 70,000mt from the previous week. But 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 mid $115 level per ton for March 2024 loading as of the latter half of the week. The level was down nearly $3 from the end of the previous week. Coal prices were weighed by slowing demand amid ongoing mild winter.

In the crude oil market, WTI crude for March 2024 stood in the high $76 level as of afternoon on Jan 26 while Brent crude for March 2024 was trading in the low $82 level. Both WTI and Brent were up about more than $3 from the end of the previous week. Crude prices were bolstered by recovering economic indexes from US and China, especially when US crude oil inventories dwindled more sharply than market expectations.

The actual highest price during the week was at Yen 20.87 in seven areas from Tokyo to Kyushu for Jan 24 delivery and West Japan for Jan 25 delivery. Meanwhile, the actual lowest price during the week was at Yen 5.12 in Hokkaido and Tohoku for Jan 25 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 9.61 in Hokkaido, down Yen 0.38 from the previous week, Yen 9.56 in Tohoku, down Yen 0.41, Yen 11.83 in Tokyo, up Yen 0.36, Yen 11.81 in Chubu, up Yen 0.78, 11.63 in Hokuriku, up Yen 1.23, Yen 11.61 in Kansai and Chugoku, up Yen 1.42, Yen 11.60 in Shikoku, up Yen 1.42, and Yen 11.60 in Kyushu, up Yen 1.41.

In the JEPX auction, volumes of offers were 1,110.59 mil kWh on a weekly average basis, down 2.2% from the previous week. Meanwhile, bids on a weekly average basis expanded by 11.2% to 954.81 mil kWh. The weekly average of trade volumes grew by 2.5% to 726.34 mil kWh.

Power demand in nine areas of Japan during Jan 22-26 was a combined 14,285.74 mil kWh, up 3.6% from 13,791.79 mil kWh Jan 15-19. The figure was down 8.0% from the corresponding period a year earlier. Demand during Jan 23-27, 2023 after day of week adjustment was 15,524.26 mil kWh.

In the JEPX forward market, no deals were confirmed during Jan 22-26.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Jan 22-26 were as below.

Deals reported on EEX (European Energy Exchange) during Jan 22-26 were as below.

In the final week of January, spot power prices are expected to soften from the fourth week. The temperatures are forecast to be higher than normal, so that a moderate slowdown in heating demand is likely to work unfavorably for spot prices. Several players echoed, "The market will have limited upside potential going forward," expressing little concerns over price hikes.