In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Oct 7-11 delivery were little moved from the previous week in East Japan (50Hz), but eased back in West Japan (60Hz). As post-summer heat gradually eased, air-conditioning demand began calming down, putting a lid on spot prices. But East Japan marked the Yen 20 level from evening onward throughout the week. A source at a power producer and supplier said, "The levels in Tokyo were overdone in comparison with the latest status of demand and fuel prices." A source at another power producer and supplier also said, "Market-linked pricing menus are now widespread among retail players. Those players cast more bids at the market and this is why spot prices have limited downside room." Meanwhile, West Japan came under growing pressure, with a flood of Yen 0.01 during midday hours led by Kyushu. With limited upside potential in spot prices amid falling temperatures, ample solar power supply served as a bearish factor. In Kyushu and Shikoku, power producers exercised output controls on renewable energy, a move that was typical for the non-peak demand season.

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 1.57 for Oct 7 delivery, Yen 5.62 for Oct 8 delivery, Yen 7.16 for Oct 9 delivery, Yen 5.37 for Oct 10 delivery, and Yen 7.27 for Oct 11 delivery. The East-West gap widened even more remarkably.

In the fuel markets, LNG prices pulled back from the end of the previous week. Coal prices were almost intact while crude prices gained ground.

DES Northeast Asia spot LNG prices hovered in the high $12 level per mmBtu for prompt November 2024 arrival as of Oct 10, down about 25cts from the end of the previous week (Oct 4). LNG prices were dragged down by a softness in European natural gas prices combined with ample availability. The Ministry of Economy, Trade and Industry (METI) announced on Oct 9 that Japan's LNG inventories for power generation stood at 2.02 mil mt as of Oct 6, up 30,000mt from a week before. The level was down from 2.19 mil mt as of end-October last year and equal to the average of past five years at 2.02 mil mt.

FOB Newcastle thermal coal prices in Australia stood at $148 per ton for October 2024 loading as of Oct 10. The level was almost flat from the end of the previous week. Shrugging off a weakness in gas prices, military tensions in the Middle East pushed up crude oil prices, leaving the coal market directionless.

In the crude oil market, WTI crude for November 2024 stood in the high $75 level as of the afternoon on Oct 11 while Brent crude for December 2024 was trading in the low $79 level. Both WTI and Brent were up about $1 from the end of the previous week. Escalating tensions in the Middle East served as a bullish factor amid concerns that Israel would retaliate against Iran. But the price gains were limited by profit-taking and a buildup in US crude oil inventories.

The actual highest price during the week was at Yen 30.00 in five areas in West Japan from Chubu to Shikoku for Oct 7 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Kyushu for Oct 9 and Oct 10 delivery, and six areas in West Japan for Oct 11 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 13.67 in Hokkaido, up Yen 1.85 from the previous week, Yen 14.80 in Tohoku, down Yen 0.12, Yen 15.87 in Tokyo, down Yen 0.09, Yen 11.49 in Chubu, down Yen 2.21, Yen 10.48 in Hokuriku and Kansai, down Yen 1.77, Yen 10.46 in Chugoku, down Yen 1.79, Yen 10.37 in Shikoku, down Yen 1.80, and Yen 9.05 in Kyushu, down Yen 2.98.

In the JEPX auction, volumes of offers were 1,007.26 mil kWh on a weekly average basis, down 3.0% from the previous week. Meanwhile, bids on a weekly average basis shrank by 5.2% to 907.74 mil kWh. The weekly average of trade volumes decreased by 4.9% to 673.78 mil kWh.

Power demand in nine areas of Japan during Oct 7-11 was a combined 10,850.35 mil kWh, down 6.0% from 11,544.30 mil kWh during Sep 30-Oct 4. The figure was up 5.3% from the corresponding period a year earlier. Demand during Oct 9-13, 2023 after day of week adjustment was 10,306.56 mil kWh.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Oct 7-11 were as below.

Deals reported on EEX (European Energy Exchange) during Oct 7-11 were as below.

In the third week of October, spot prices are expected to chase upside from the second week in both East Japan and West Japan. In Kanto, the highest temperature will exceed 25 degrees for most of the week, so that buying activity will likely gain momentum to satisfy actual demand. In West Japan as well, the highest temperature is forecast to reach around 27 degrees in many areas following the second week. The day's high will even rise near 30 degrees in the latter half of the week, a factor that is believed to give a bullish impact on spot prices. With many thermal units off line for regular maintenance in both East Japan and West Japan, lower reserve rates are boosting price volatility at this point. Thus, any change in temperatures and fresh facility troubles should be closely monitored.