In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Sep 30-Oct 4 delivery bounced back from the previous week in both East Japan (50Hz) and West Japan (60Hz). Amid persistent high temperatures, a sharply increasing number of thermal units halted operation for regular maintenance since the beginning of October. Thus, tightening supply-demand fundamentals lifted spot prices. In addition, maintenance works at interconnection lines served as a bullish factor in some areas.

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 2.05 for Sep 30 delivery, Yen 4.40 for Oct 1 delivery, Yen 4.46 for Oct 2 delivery, Yen 2.64 for Oct 3 delivery, and Yen 4.99 for Oct 4 delivery.

In the fuel markets, LNG and coal prices softened from the end of the previous week. Crude oil prices turned higher.

DES Northeast Asia spot LNG prices hovered around $13 per mmBtu for prompt November 2024 arrival as of Oct 3, down about 25cts from the end of the previous week (Sep 27). LNG prices came under pressure from sporadically-placed offers combined with an unabated slump in buying interest. But the fall in LNG prices was limited by escalating tensions in the Middle East. The Ministry of Economy, Trade and Industry (METI) announced on Oct 2 that Japan's LNG inventories for power generation stood at 1.99 mil mt as of Sep 29, up 360,000mt from a week before. The level was up from 1.64 mil mt as of end-September last year and equal to the average of past five years at 1.99 mil mt.

FOB Newcastle thermal coal prices in Australia stood at slightly above $140 per ton for October 2024 loading as of Oct 2. The level was down nearly $5 from the end of the previous week, mirroring a softness in gas prices.

In the crude oil market, WTI crude for November 2024 stood in the mid $73 level as of the afternoon on Oct 4 while Brent crude for December 2024 was trading in the mid $77 level. Compared with the end of the previous week, WTI rallied by about $5.50 while Brent was up about $6. Heightening tensions in the Middle East bolstered crude oil prices. Israel showed readiness to retaliate against Iran, following Iran's ballistic missile attacks on Israel on Oct 1.

The actual highest price during the week was at Yen 39.00 in three areas in East Japan for Oct 4 delivery. Meanwhile, the actual lowest price during the week was at Yen 4.00 in Hokkaido for Sep 30 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 11.82 in Hokkaido, up Yen 0.40 from the previous week, Yen 14.92 in Tohoku, up Yen 3.23, Yen 15.96 in Tokyo, up Yen 3.63, Yen 13.70 in Chubu, down Yen 0.43, Yen 12.25 in Hokuriku, up Yen 1.51, Yen 12.25 in Kansai and Chugoku, up Yen 1.51, Yen 12.17 in Shikoku, up Yen 1.43, and Yen 12.03 in Kyushu, up Yen 1.92.

In the JEPX auction, volumes of offers were 1,037.95 mil kWh on a weekly average basis, down 14.1% from the previous week. Meanwhile, bids on a weekly average basis grew by 1.9% to 957.96 mil kWh. The weekly average of trade volumes waned by 4.0% to 708.36 mil kWh.

Power demand in nine areas of Japan during Sep 30-Oct 4 was a combined 11,544.29 mil kWh, up 1.6% from 11,364.56 mil kWh during Sep 23-27. The figure was up 7.2% from the corresponding period a year earlier. Demand during Oct 2-6, 2023 after day of week adjustment was 10,772.47 mil kWh.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Sep 30-Oct 4 were as below.

Deals reported on EEX (European Energy Exchange) during Sep 30-Oct 4 were as below.

In the second week of October, spot prices are expected to stay in a tight range from the first week. The weather is forecast to be cloudy until around the middle of the week in West Japan and throughout the week in East Japan. A squeeze in solar power supply could serve as a bullish factor, but the temperatures are forecast to fall amid eased post-summer heat, so that buying interest to satisfy actual demand will be limited. Thus, the market may lack direction. But with several thermal units out of service, there is a growing risk of price spikes in case of any troubles at generation facilities.