In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Feb 26-Mar 1 delivery gained further ground from the previous week in both East Japan and West Japan. Mild winter persisted since the beginning of February, but the temperatures widely dropped to seasonal levels in the final week of February. In addition, the weather was rather cloudy mostly during the week, helping tighten up supply-demand fundamentals. But spot prices still had limited upside room, and the intraday high failed to reach Yen 20.

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 1.25 for Feb 26 delivery, Yen 0.79 for Feb 27 delivery, Yen 2.21 for Feb 28 delivery, Yen 0.16 for Feb 29 delivery, and Yen 1.15 for Mar 1 delivery.

In the fuel markets, LNG and coal prices gained ground from the previous week, but crude oil priced edged lower.

DES Northeast Asia spot LNG prices hovered in the high $8 level per mmBtu for prompt April 2024 arrival as of Feb 29, up nearly 30cts from the end of the previous week (Feb 22). Spot buying gained momentum led by Chinese end-users amid perceptions the recent declines made LNG prices attractive. In addition, a strength in European natural gas prices lent support to the LNG market. The Ministry of Economy, Trade and Industry (METI) announced on Feb 28 that Japan's LNG inventories for power generation stood at 2.16 mil mt as of Feb 25, up 70,000mt from the previous week. The level was below 2.48 mil mt as of end-February last year, but exceeded the average of past five years at 2.13 mil mt.

FOB Newcastle thermal coal prices in Australia hovered in the low $132 level per ton for April 2024 loading as of the latter half of the week. The level rose by nearly $8 from the end of the previous week in reaction to a gain in gas prices.

In the crude oil market, WTI crude for April 2024 stood in the low $78 level as of afternoon on Mar 1 while Brent crude for May 2024 was trading in the low $82 level. Both WTI and Brent were a shade lower than the end of the previous week. Crude prices found continued support from the Middle East situation. But a larger-than-expected buildup in US crude oil inventories worked unfavorably for the market. Both bullish and bearish factors played a tug of war, leaving crude prices directionless.

The actual highest price during the week was at Yen 19.73 in Hokkaido for Feb 26 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Kyushu for Feb 27 and Mar 1 delivery and five areas from Hokuriku to Kyushu for Feb 28 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 10.12 in Hokkaido, up Yen 0.84 from the previous week, Yen 10.06 in Tohoku, up Yen 0.65, Yen 10.22 in Tokyo, up Yen 0.38, Yen 9.75 in Chubu, up Yen 0.03, Yen 9.29 in Hokuriku, up Yen 0.45, Yen 9.10 in Kansai, Chugoku and Shikoku, up Yen 0.52, and Yen 8.50 in Kyushu, up Yen 0.05.

In the JEPX auction, volumes of offers were 1,127.13 mil kWh on a weekly average basis, down 2.8% from the previous week. Meanwhile, bids on a weekly average basis expanded by 8.2% to 927.14 mil kWh. The weekly average of trade volumes dwindled by 8.6% to 707.00 mil kWh.

Power demand in nine areas of Japan during Feb 26-Mar 1 was a combined 13,147.69 mil kWh, up 6.5% from 12,347.77 mil kWh Feb 19-23. The figure was up 5.5% from the corresponding period a year earlier. Demand during Feb 27-Mar 3, 2023 after day of week adjustment was 12,467.68 mil kWh.

In the JEPX forward market, no deals were confirmed during Feb 26-Mar 1.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Feb 26-Mar 1 were as below.

Deals reported on EEX (European Energy Exchange) during Feb 26-Mar 1 were as below.

In the second week of March, spot power prices are expected to stay in a tight range. The temperatures are forecast to be stable or lower than normal years mostly during the week, but the weather will be rather sunny than the final week of February mainly in West Japan. Solar power supply can be expected to some extent, a factor that will continue to put a lid on spot prices led by day time. But power reserve rates will decrease with an increasing number of thermal units scheduled to halt operation. Spot prices will have a chance to hit unexpected highs in case of any troubles at generation units.