In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Jul 1-5 delivery gained ground from the previous week in both East Japan and West Japan. Spot prices were lifted by robust buying interest as the peak-demand season in summer went into full swing. Summer heat lingered throughout the week. Especially in the latter half of the week, the temperatures on Jul 4-5 exceeded 35 degrees widely from Kyushu to Kanto. In Tokyo, the peak demand on Jul 4 expanded above 50GW for the first time since September last year. The peak demand on Jul 5 also exceeded 51GW. Despite such a pickup in power demand, spot prices were relatively calm, with the weekly high capped in the Yen 21 level. A source at a power producer and supplier said, "Heavy selling put a lid on spot prices." Offers continued to outpace bids throughout the week, wiping out the outlook for growing air-conditioning demand.

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 2.33 for Jul 1 delivery, Yen 1.19 for Jul 2 delivery, Yen 1.21 for Jul 3 delivery, Yen 2.85 for Jul 4 delivery and Yen 1.81 for Jul 5 delivery.

In the fuel markets, LNG prices weakened from the end of the previous week, but coal and crude oil prices turned higher.

DES Northeast Asia spot LNG prices hovered in the low $12 level per mmBtu for prompt August 2024 arrival as of Jul 4, down about 70cts from the end of the previous week (Jun 28). Natural gas prices in Europe softened from the previous week. Besides that, an unabated supply glut in Northeast Asia pressured down the LNG market. The peak-demand summer season kicked off, but some end-users apparently moved to resell their excess cargoes. The Ministry of Economy, Trade and Industry (METI) announced on Jul 3 that Japan's LNG inventories for power generation stood at 2.09 mil mt as of Jun 30, up 20,000mt from the previous week. The level was up both from 2.08 mil mt as of end-June last year and the average of past five years at 2.01 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the mid $136 level per ton for July 2024 loading as of Jul 4. The level was up more than $3 from the end of the previous week.

In the crude oil market, WTI crude for August 2024 stood in the high $83 as of afternoon on Jul 5 while Brent crude for September 2024 was trading in the low $87 level. Both WTI and Brent were up more than $2 from the end of the previous week. Crude futures were outpaced by buying amid escalating geopolitical risks in the Middle East and Ukraine, on top of a larger-than-expected drawdown in US crude oil inventories.

The actual highest price during the week was at Yen 21.59 in all of nine areas and the System Price (SP) for Jul 4 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Hokkaido and Tohoku for Jul 1 and Jul 2 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 10.92 in Hokkaido, up Yen 0.03 from the previous week, Yen 10.58 in Tohoku, down Yen 0.70, Yen 14.10 in Tokyo, up Yen 0.96, Yen 13.14 in Chubu, up Yen 0.60, Yen 12.22 in Hokuriku, up Yen 0.73, Yen 12.22 in Kansai and Chugoku, up Yen 0.91, Yen 11.59 in Shikoku, up Yen 1.74, and Yen 12.04, up Yen 0.74.

In the JEPX auction, volumes of offers were 1,123.20 mil kWh on a weekly average basis, up 3.8% from the previous week. Meanwhile, bids on a weekly average basis expanded by 11.1% to 922.98 mil kWh. The weekly average of trade volumes grew by 10.2% to 729.82 mil kWh.

Power demand in nine areas of Japan during Jul 1-5 was a combined 13,045.65 mil kWh, up 10.4% from 11,813.67 mil kWh during Jun 24-28. The figure was up 3.6% from the corresponding period a year earlier. Demand during Jul 3-7, 2023 after day of week adjustment was 12,590.72 mil kWh.

In the JEPX forward market, no deals were confirmed during Jul 1-5.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Jul 1-5 were as below.

Deals reported on EEX (European Energy Exchange) during Jul 1-5 were as below.

In the second week of July, spot prices are believed to stay in a similar range as the first week. After the weekend, the highest temperature on Jul 8 is forecast to reach the extremely hot day indicator of 35 degrees widely from Kyushu to Kanto. The day's high on Jul 9 is also expected to rise near 35 degrees. Extreme summer heat is expected to ease from Jul 10 onward, but the weather is forecast to be rainy across Japan with little scope for photovoltaic generation. High humidity is also likely to help spot prices resist downside pressure. Despite that, all market players ruled out a possibility of extreme price spikes. It is widely believed the intraday high in spot prices will be capped below Yen 25 without facility troubles.