In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Sep 23-27 delivery weakened from the previous week in both East Japan (50Hz) and West Japan (60Hz). Heat waves were alleviated from the previous week across Japan, and heavy selling pressured down spot prices.

Meanwhile, Chubu leaped to hit Yen 100.00 during 17:00-18:00 hours for delivery on a Japanese holiday on Sep 23, sandwiched by the Yen 80 level in adjacent windows. Several players echoed, "The upsurge could have been caused by wrong orders." But a source at a power producer and supplier noted, "The lack of offers may have caused the spike." The 24-hour average for Sep 23 delivery stood at 19.37 in Chubu, compared with Yen 11.14 in Tokyo and Yen 8.96 in Kansai. For Sep 27 delivery, meanwhile, spot prices in Chubu were pegged in the Yen 30-40 levels during 14:00-17:00 hours. During the time zone, spot prices centered in the Yen 15-16 levels in three areas in East Japan and the Yen 19 level in five areas from Hokuriku to Shikoku while Kyushu hovered in a range of Yen 6 to the Yen 18 level. Thus, Chubu posted outstanding strength among nine areas. Skepticism grew over the price trends in Chubu, but a source at a power producer and supplier said, "Chubu has larger demand for high and extra-high voltage power than other areas. Amid unbated post-summer heat, spot prices were affected by complex factors including heavy maintenance at thermal units and maintenance works at the FC (Frequency Convertor)."

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 2.18 for Sep 23 delivery, Yen 2.08 for Sep 24 delivery, Yen 0.97 for Sep 25 delivery, Yen 1.49 for Sep 26 delivery, and Yen 1.23 for Sep 27 delivery.

In the fuel markets, LNG and coal prices gained ground from the end of the previous week. Crude oil prices turned lower.

DES Northeast Asia spot LNG prices hovered in the low $13 level per mmBtu for prompt November 2024 arrival as of Sep 26, up about 35cts from the end of the previous week (Sep 20). LNG prices found support from a strength in European natural gas prices coupled with stable buying interest from end-users in Northeast Asia including South Korea, Taiwan and Japan. The Ministry of Economy, Trade and Industry (METI) announced on Sep 25 that Japan's LNG inventories for power generation stood at 1.64 mil mt as of Sep 22, down 230,000mt from a week before. The level was equal to 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 mid $143 level per ton for October 2024 loading as of Sep 26. The level was up about $4.50 from the end of the previous week, in response to a gain in gas prices.

In the crude oil market, WTI crude for November 2024 stood in the mid $67 level as of the afternoon on Sep 27 while Brent crude for November 2024 was trading in the high $70 level. Compared with the end of the previous week, WTI was down nearly $3.50 while Brent gave up about $4. Uncertainty grew over the outlook of the European and US economies while supply fears for Libyan crude oil were alleviated. In the latter half of the week, crude futures were pulled steeply lower by expectations that Saudi Arabia would pump more oil. Saudi Arabia was said to have abandoned its own price target of $100 per barrel and was ready to increase production from December.

The actual highest price during the week was at Yen 100.00 in Chubu for Sep 23 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in six areas in West Japan for Sep 24 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 11.42 in Hokkaido, down Yen 4.89 from the previous week, Yen 11.69 in Tohoku, down Yen 6.36, Yen 12.33 in Tokyo, down Yen 6.74, Yen 14.13 in Chubu, down Yen 4.45, Yen 10.74 in Hokuriku, down Yen 7.08, Yen 10.74 in Kansai and Chugoku, down Yen 5.04, Yen 10.74 in Shikoku, down Yen 4.95, and Yen 10.11 in Kyushu, down Yen 4.68.

In the JEPX auction, volumes of offers were 1,208.33 mil kWh on a weekly average basis, up 15.3% from the previous week. Meanwhile, bids on a weekly average basis dwindled by 13.9% to 940.02 mil kWh. The weekly average of trade volumes shrank by 7.3% to 738.12 mil kWh.

Power demand in nine areas of Japan during Sep 23-27 was a combined 11,364.55 mil kWh, down 18.4% from 13,921.43 mil kWh during Sep 16-20. The figure was down 5.6% from the corresponding period a year earlier. Demand during Sep 25-29, 2023 after day of week adjustment was 12,044.83 mil kWh.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Sep 23-27 were as below.

Deals reported on EEX (European Energy Exchange) during Sep 23-27 were as below.

In the fourth week of September, spot prices are expected to show solid movements. The highest temperature in West Japan is forecast to stay around 30 degrees mostly during the week. In Kanto as well, the day's high will reach near 30 degrees at the beginning of the week. Meanwhile, a sharply increasing number of thermal units and pumped storage power stations are scheduled to halt operation for regular maintenance starting Oct 1. Lower reserve rates are likely to serve as a bullish factor for spot prices. The temperatures are forecast to remain relatively high in October, and spot prices will have limited downside room even during the non-peak demand period.