In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Sep 16-20 delivery gained further ground from the previous week in East Japan (50Hz), but pulled back in West Japan (60Hz). From Kyushu to Kanto, the highest temperature reached an extremely hot day indicator of 35 degrees throughout the week. Intense heat waves continued to create high air-conditioning demand. On Sep 18, the day's high in Tokyo rose to 35.1 degrees, marking 35 degrees at the latest on record since 1875. During Sep 17-19 delivery, the intraday high in spot prices topped Yen 40 in six areas from Hokkaido to Hokuriku and even marked Yen 19.65 for Sep 19 delivery, a level that was shy of the Yen 50 mark. In West Japan, meanwhile, spot prices weakened in Kansai and further west as price decoupling at the Hokuriku-Kansai border occurred in a series of windows throughout the week. As a result, spot prices in the whole West Japan turned lower from the previous week.

Meanwhile, the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) ordered emergency power supply to Kansai during Sep 17-19 and to Chubu on Sep 19 in a bid to cope with a supply crunch created by high temperatures. Elsewhere, supply-demand fundamentals in Tokyo were expected to tighten up during Sep 17-20. Thus, TEPCO reviewed its overhaul plans for generation units and postponed some of its planned maintenance works.

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 3.47 for Sep 16 delivery, Yen 3.11 for Sep 17 delivery, Yen 5.31 for Sep 18 delivery, Yen 1.95 for Sep 19 delivery, and Yen 2.71 for Sep 20 delivery.

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

DES Northeast Asia spot LNG prices hovered in the mid $13 level per mmBtu for prompt November 2024 arrival as of Sep 19, up about 15cts from the end of the previous week (Sep 13). LNG prices found support from a solidness in European natural gas prices combined with stable buying interest in Northeast Asia amid severe heat waves. But the market's gain was limited by an unabated supply glut. The Ministry of Economy, Trade and Industry (METI) announced on Sep 18 that Japan's LNG inventories for power generation stood at 1.88 mil mt as of Sep 15, down 210,000mt from a week before. The level was up from 1.64 mil mt as of end-September last year but down from the average of past five years at 1.99 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the high $136 per ton for October 2024 loading as of Sep 19. The level was up about $2.00 from the end of the previous week, in tandem with a rise in gas prices.

In the crude oil market, WTI crude for October 2024 stood around $72 as of the morning on Sep 20 while Brent crude for November 2024 was trading in the high $74 level. Both WTI and Brent were up about $3.00 from the end of the previous week. Crude futures were bolstered by a decision by the US Federal Reserve Board (FRB) to lower key interest rates by 0.50% at the Federal Open Market Committee (FOMC) held on Sep 17-18, together with escalating geopolitical risks in the Middle East. In Lebanon, pagers exploded across the country on Sep 17, killing and wounding many people. Pro-Iranian militant group Hezbollah insisted that the explosions were caused by an organized attack by Israel at war, raising caution over retaliatory attacks.

The actual highest price during the week was at Yen 49.65 in six areas from Hokkaido to Hokuriku for Sep 19 delivery. Meanwhile, the actual lowest price during the week was at Yen 5.01 in Kyushu for Sep 16-17 delivery and Hokkaido for Sep 19 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 16.31 in Hokkaido, up Yen 0.35 from the previous week, Yen 18.05 in Tohoku, up Yen 1.71, Yen 19.07 in Tokyo, up Yen 1.24, Yen 18.58 in Chubu, up Yen 0.56, Yen 17.82 in Hokuriku, up Yen 0.71, Yen 15.78 in Kansai and Chugoku, down Yen 1.33, Yen 15.69 in Shikoku, down Yen 1.42, and Yen 14.79 in Kyushu, down Yen 0.49.

In the JEPX auction, volumes of offers were 1,048.04 mil kWh on a weekly average basis, down 0.6% from the previous week. Meanwhile, bids on a weekly average basis waned by 2.6% to 1,091.16 mil kWh. The weekly average of trade volumes increased by 0.9% to 796.35 mil kWh.

Power demand in nine areas of Japan during Sep 16-20 was a combined 13,921.43 mil kWh, down 3.6% from 14,436.90 mil kWh during Sep 9-13. The figure was up 7.1% from the corresponding period a year earlier. Demand during Sep 18-22, 2023 after day of week adjustment was 13,006.01 mil kWh.

In the JEPX forward market, no deals were confirmed during Sep 16-20.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Sep 16-20 were as below.

Deals reported on EEX (European Energy Exchange) during Sep 16-20 were as below.

In the fourth week of September, spot prices are expected to come under heavier downside pressure than the third week. The highest temperature in the third week reached the extremely hot day indicator of 35 degrees from Kyushu to Kanto throughout the week. But the day's high will drop around 30 degrees in the fourth week, so that air-conditioning demand is likely to slow down. Curbed buying interest is believed to put a lid on spot prices. But an increasing number of thermal units are scheduled to halt operation for regular maintenance. Furthermore, the weather is forecast to turn cloudy in a wider range of areas from the middle of the week. Thus, limited output from photovoltaic generation is expected to peg spot prices at double digits in many windows.