In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Mar 4-8 delivery extended a rally from the previous week in both East Japan and West Japan. With an increasing number of thermal units sent off line for regular maintenance since the beginning of March, ongoing lower-than-normal temperatures tightened up supply-demand fundamentals, leading to the rise in spot power prices. Kanto Koshin suffered freezing mid-winter climate with snowfall from night time on Mar 7 through Mar 8. In Tokyo, the peak demand on Mar 8 expanded to a level shy of 48GW.

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 0.05 for Mar 4 delivery, Yen 2.03 for Mar 6 delivery, Yen 1.06 for Mar 7 delivery, and Yen 3.02 for Mar 8 delivery. West Japan outperformed East Japan by Yen 1.56 for Mar 5 delivery.

In the fuel markets, LNG, coal and crude oil prices rose across the board from the previous week.

DES Northeast Asia spot LNG prices hovered at $9 per mmBtu for prompt April 2024 arrival as of Mar 7, up nearly 50cts from the end of the previous week (Mar 1). On top of a strength in European natural gas prices, sustained spot buying by Chinese end-users underpinned the market. The Ministry of Economy, Trade and Industry (METI) announced on Mar 6 that Japan's LNG inventories for power generation stood at 1.95 mil mt as of Mar 3, down 210,000mt from the previous week. The level was below 2.48 mil mt as of end-February last year and the average of past five years at 2.13 mil mt. Ongoing relatively low temperatures gave a boost to heating demand.

FOB Newcastle thermal coal prices in Australia hovered in the mid $137 level per ton for April 2024 loading as of the latter half of the week. The level rallied by more than $5 from the end of the previous week in response to a rise in gas prices. The coal market also firmed up, partly expecting the benchmark price negotiation by a Japanese leading power utility and a non-Japanese energy trading house.

In the crude oil market, WTI crude for April 2024 stood in the mid $79 level as of afternoon on Mar 8 while Brent crude for May 2024 was trading in the mid $83 level. Both WTI and Brent were up about $1.50 from the end of the previous week. Crude prices were buoyed by escalating tensions in the Middle East combined with a larger-than-expected drawdown in US oil products inventories.

The actual highest price during the week was at Yen 25.84 in Tohoku and Tokyo for Mar 8 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Kyushu for Mar 4 and Mar 7-8 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 13.28 in Hokkaido, up Yen 3.16 from the previous week, Yen 12.11 in Tohoku, up Yen 2.05, Yen 12.17 in Tokyo, up Yen 1.95, Yen 11.42 in Chubu, up Yen 1.67, Yen 11.26 in Hokuriku, up Yen 1.97, Yen 11.25 in Kansai, Chugoku and Shikoku, up Yen 2.15, and Yen 10.40 in Kyushu, up Yen 1.90.

In the JEPX auction, volumes of offers were 942.70 mil kWh on a weekly average basis, down 16.4% from the previous week. Meanwhile, bids on a weekly average basis grew by 2.8% to 953.44 mil kWh. The weekly average of trade volumes shrank by 5.9% to 665.04 mil kWh.

Power demand in nine areas of Japan during Mar 4-8 was a combined 13,374.24 mil kWh, up 1.7% from 13,147.69 mil kWh Feb 26-Mar 1. The figure was up 15.9% from the corresponding period a year earlier. Demand during Mar 6-10, 2023 after day of week adjustment was 11,537.03 mil kWh.

In the JEPX forward market, no deals were confirmed during Mar 4-8.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Mar 4-8 were as below.

Deals reported on EEX (European Energy Exchange) during Mar 4-8 were as below.

In the third week of March, spot power prices are expected to deepen falls from the second week. Chilly mid-winter climate prevailed in the second week, but mild spring climate is forecast to return in the third week, and a steep fall in heating demand is likely to give a negative impact on spot prices. Meanwhile, the weather is forecast to remain sunny across Japan from the middle of the week, a factor that will create ample solar power supply. In West Japan led by Kyushu, midday prices are likely to hit Yen 0.01 mostly during the week.