In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Aug 19-23 delivery rebounded from the previous week in both East Japan (50Hz) and West Japan (60Hz). The price rise came as power demand increased from the previous week as factory operations returned to normal after the Obon break. In East Japan, summer heat in Kanto was alleviated compared with the previous week. But the temperatures in West Japan exceeded the extremely hot day indicator of 35 degrees throughout the week. The wider temperature gap between East Japan and West Japan, sending the East-West price spread into a reverse pattern in favor of the West again. The spread was in a normal pattern in favor of the East a week before.

In Tokyo and Kansai, the key areas in East Japan and West Japan, the 24-hour average posted a difference in favor of the West by Yen 0.23 for Aug 19 delivery, Yen 0.47 for Aug 20 delivery, Yen 1.25 for Aug 21 delivery, Yen 1.25 for Aug 22 delivery, and Yen 1.85 for Aug 23 delivery.

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

DES Northeast Asia spot LNG prices hovered in the high $13 level per mmBtu for prompt September 2024 arrival as of Aug 22, softening by about 30cts from the end of the previous week (Aug 16). The LNG market was weighed by an overall softness in European natural gas prices during the week, coupled with slack buying interest in Northeast Asia. The Ministry of Economy, Trade and Industry (METI) announced on Aug 21 that Japan's LNG inventories for power generation stood at 1.92 mil mt as of Aug 18, down 60,000mt from a week before. The level was up from 1.72 mil mt as of end-August last year, but down from the average of past five years at 2.02 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the high $146 per ton for August 2024 loading as of Aug 22. The level was down about $3.00 from the end of the previous week, in reaction to a fall in gas and crude oil prices.

In the crude oil market, WTI crude for October 2024 stood in the high $72 level as of the morning on Aug 23 while Brent crude for October 2024 was trading in the low $77 level. Both WTI and Brent were down about $2.50 from the end of the previous week. Crude futures were outpaced by sell-offs amid alleviated concerns over the Middle East situation, beside growing uncertainty over the economic outlook in US and China.

The actual highest price during the week was at Yen 36.00 in West Japan for Aug 23 delivery. It was the highest price since Yen 36.59 marked in all of nine areas and the System Price (SP) for Aug 21 delivery. Meanwhile, the actual lowest price during the week was at Yen 8.89 in Hokkaido for Aug 23 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 13.73 in Hokkaido, up Yen 1.13 from the previous week, Yen 14.57 in Tohoku, up Yen 1.78, Yen 15.65 in Tokyo, up Yen 1.79, Yen 16.90 in Chubu, up Yen 4.17, Yen 16.95 in Hokuriku, Kansai, Chugoku and Shikoku, up Yen 4.75, and Yen 15.77 in Kyushu, up Yen 3.97.

In the JEPX auction, volumes of offers were 1,181.51 mil kWh on a weekly average basis, down 9.4% from the previous week. Meanwhile, bids on a weekly average basis expanded by 8.3% to 1,099.91 mil kWh. The weekly average of trade volumes grew by 4.8% to 806.57 mil kWh.

Power demand in nine areas of Japan during Aug 19-23 was a combined 14,355.48 mil kWh, up 17.1% from 12,260.49 mil kWh during Aug 12-16. The figure was down 0.6% from the corresponding period a year earlier. Demand during Aug 21-25, 2023 after day of week adjustment was 14,441.01 mil kWh.

In the JEPX forward market, no deals were confirmed during Aug 19-23.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Aug 19-23 were as below.

Deals reported on EEX (European Energy Exchange) during Aug 19-23 were as below.

In the final week of August, evening prices in West Japan are expected to have limited upside potential. The highest temperature in West Japan is forecast around 31-33 degrees as intense summer heat in recent days is expected to ease. But the weather is forecast to be rainy across Japan throughout the week, so that midday prices are believed to hover in the mid to high Yen 10 level in line with the current fuel costs. As a result, the East-West spread that is currently in favor of the West is expected to shrink.