In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Jun 3-7 delivery lost ground from the previous week in both East Japan and West Japan. Output from photovoltaic generation increased in both East Japan and West Japan, boosting downside pressure on day time prices. The market was also weighted by growing excess supply after an increasing number of thermal units resumed operation after regular maintenance.

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 4.41 for Jun 3 delivery, Yen 3.98 for Jun 4 delivery, Yen 2.25 for Jun 5 delivery, Yen 1.00 for Jun 6 delivery and Yen 2.79 for Jun 7 delivery.

In the fuel markets, LNG, coal and crude oil prices weakened from the previous week.

DES Northeast Asia spot LNG prices hovered in the high $11 level per mmBtu for prompt July 2024 arrival as of Jun 6, down about 30cts from the end of the previous week (May 31). The market was pressured by a softness in European natural gas prices, at a time when the Gorgon project in Australia returned to normal operation after a shutdown caused by supply disruptions. In addition, LNG prices were weighed by a move by Chinese players to release more cargoes capitalizing on the current high prices. The Ministry of Economy, Trade and Industry (METI) announced on Jun 5 that Japan's LNG inventories for power generation stood at 2.23 mil mt as of Jun 2, up 170,000mt from the previous week. The level was down from 2.41 mil mt as of end-May last year, but up from the average of past five years at 2.11 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the low $134 level per ton for June 2024 loading as of Jun 6. The level was down nearly $8 from the end of the previous week.

In the crude oil market, WTI crude for July 2024 stood in the mid $75 as of afternoon on Jun 7 while Brent crude for August 2024 was trading in the high $79 level. Both WTI and Brent were down about $2 from the end of the previous week. Crude futures were overshadowed by prospects for a delayed recovery in the US economy and increasing supply from the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, or OPEC plus. At the ministerial meeting on Jun 2, OPEC plus decided to gradually phase out the size of its joint production cuts staring October.

The actual highest price during the week was at Yen 16.45 in Tokyo for Jun 6 and Jun 7 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in West Japan and the System Price (SP) for Jun 3 and Jun 5 delivery, and West Japan for Jun 4 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 10.67 in Hokkaido, down Yen 2.36 from the previous week, Yen 10.61 in Tohoku, down Yen 1.53, Yen 11.45 in Tokyo, down Yen 1.41, Yen 9.21 in Chubu, down Yen 1.77, Yen 8.56 in Hokuriku and Kansai, down Yen 2.05, Yen 8.50 in Chugoku, down Yen 2.11, Yen 8.41 in Shikoku, down Yen 1.44, and Yen 8.41 in Kyushu, down Yen 2.05.

In the JEPX auction, volumes of offers were 1,134.37 mil kWh on a weekly average basis, up 13.1% from the previous week. Meanwhile, bids on a weekly average basis decreased by 2.9% to 826.72 mil kWh. The weekly average of trade volumes grew by 2.7% to 657.01 mil kWh.

Power demand in nine areas of Japan during Jun 3-7 was a combined 10,603.86 mil kWh, up 0.1% from 10,596.66 mil kWh during May 27-31. The figure was down 1.3% from the corresponding period a year earlier. Demand during Jun 5-9, 2023 after day of week adjustment was 10,746.74 mil kWh.

In the JEPX forward market, no deals were confirmed during Jun 3-7.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Jun 3-7 were as below.

Deals reported on EEX (European Energy Exchange) during Jun 3-7 were as below.

In the second week of June, day time prices are expected to chase upside. The weather is forecast to be cloudy mostly during the week, so that a possible squeeze in solar power supply is likely to help spot prices avert extreme lows. But the temperatures are forecast to remain almost stable. Thus, the market will see limited buying to satisfy real demand, and spot prices are believed to have limited upside room. The key is when the rainy season will kick off. According to a private weather forecast company, Kyushu is forecast to enter the rainy season around Jun 15-16, followed by Kinki, Tokai and Kanto around Jun 16. In many areas, the start of the rainy season is expected to be later than normal years.