In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Feb 5-9 delivery bounced back from the previous week in both East Japan and West Japan. A cold snap arrived on Feb 5, bringing record-breaking heavy snow in Kanto and boosted heating demand in a wide range of areas. As a result, spot power prices extended gains at the beginning of the week, but came under pressure until the latter half of the week. Freezing climate eased from the middle of the week, on top of relatively ample solar power supply.

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 0.10 for Feb 5 delivery, Yen 5.88 for Feb 6 delivery, Yen 1.04 for Feb 7 delivery, Yen 0.70 for Feb 8 delivery, and Yen 0.65 for Feb 9 delivery.

In the fuel markets, LNG prices inched down from the previous week, but crude oil and coal prices firmed up.

DES Northeast Asia spot LNG prices hovered in the low $9 level per mmBtu for prompt March 2024 arrival as of the latter half of the week (Feb 8), down slightly by about 20cts from the end of the previous week (Feb 2). The market stayed in a tight range as end-users in China and South Korea generally retreated to the sidelines ahead of the Lunar New Year holidays. The Ministry of Economy, Trade and Industry (METI) announced on Feb 7 that Japan's LNG inventories for power generation stood at 2.29 mil mt as of Feb 4, up 130,000mt from the previous week. The level fell below 2.39 mil mt as of end-January last year, but still exceeded the average of past five years at 1.91 mil mt.

FOB Newcastle thermal coal prices in Australia hovered in the low $125 per ton for March 2024 loading as of the latter half of the week. The level was up more than $5 from the end of the previous week. Shrugging off a softness in gas prices, a rally in crude prices led the coal market's strength.

In the crude oil market, WTI crude for March 2024 stood in the mid $76 level as of afternoon on Feb 9 while Brent crude for April 2024 was trading in the high $81 level. Both WTI and Brent were up more than $2 from the end of the previous week. Crude prices were bolstered by concerns over a deteriorating situation in the Midde East, coupled with a drawdown in refined products stocks in US.

The actual highest price during the week was at Yen 24.17 in Tokyo for Feb 6 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Shikoku for Feb 9 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 11.31 in Hokkaido, up Yen 2.28 from the previous week, Yen 11.16 in Tohoku, up Yen 2.09, Yen 12.18 in Tokyo, up Yen 2.26, Yen 10.96 in Chubu, up Yen 1.17, 10.79 in Hokuriku, up Yen 1.16, Yen 10.50 in Kansai and Chugoku, up Yen 0.95, Yen 10.43 in Shikoku, up Yen 0.88, and Yen 10.45 in Kyushu, up Yen 0.90.

In the JEPX auction, volumes of offers were 1,107.73 mil kWh on a weekly average basis, down 7.8% from the previous week. Meanwhile, bids on a weekly average basis expanded by 6.6% to 968.88 mil kWh. The weekly average of trade volumes increased by 1.2% to 714.71 mil kWh.

Power demand in nine areas of Japan during Feb 5-9 was a combined 14,188.76 mil kWh, up 4.5% from 13,578.92 mil kWh Jan 29-Feb 2. The figure was up 2.7% from the corresponding period a year earlier. Demand during Feb 6-10, 2023 after day of week adjustment was 13,812.44 mil kWh.

In the JEPX forward market, no deals were confirmed during Feb 5-9.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Feb 5-9 were as below.

Deals reported on EEX (European Energy Exchange) during Feb 5-9 were as below.

In the third week of February, spot power prices are likely to soften further. The temperatures are forecast to remain as warm as the spring season throughout the week, and a sharp fall in heating demand is expected to hammer down buying interest. Especially in the first half of the week, sunshine will also be available, so that ample solar power supply is likely to boost downside pressure on day time prices.