In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Jul 15-19 delivery pulled back sharply from the previous week in both East Japan and West Japan. Harsh summer heat in the previous week was alleviated. Relatively comfortable climate in a wide range of areas gave a boost to offers and dented buying interest obviously, generating downside pressure on spot prices. Meanwhile, the rainy season passed southern Kyushu on Jul 17, followed by Kanto Koshin and Tokai on Jul 18.

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 4.73 for Jul 15 delivery, Yen 1.16 for Jul 16 delivery, Yen 1.75 for Jul 17 delivery, Yen 1.33 for Jul 18 delivery and Yen 0.66 for Jul 19 delivery.

In the fuel markets, LNG and coal prices gained ground from the end of the previous week. Crude oil prices turned lower.

DES Northeast Asia spot LNG prices hovered in the high $11 level per mmBtu for prompt September 2024 arrival as of Jul 18, up about 50cts from the end of the previous week (Jul 12). European natural gas prices bounced back, and the LNG market in Northeast Asia also followed suit. LNG prices also found support from a supply disruption at the Freeport project in US. The Ministry of Economy, Trade and Industry (METI) announced on Jul 17 that Japan's LNG inventories for power generation stood at 2.20 mil mt as of Jul 14, up 210,000mt from the previous week. The buildup came as relatively comfortable temperatures curbed air-conditioning demand. The level was up both from 1.94 mil mt as of end-July last year and the average of past five years at 2.19 mil mt.

FOB Newcastle thermal coal prices in Australia stood at slightly above $139 per ton for August 2024 loading as of Jul 18. The level was up about $2 from the end of the previous week. The rise reflected a strength in gas prices.

In the crude oil market, WTI crude for August 2024 stood in the mid $82 level as of morning on Jul 19 while Brent crude for September 2024 was trading in the high $84 level. Compared with the end of the previous week, WTI edged down by nearly 30cts while Brent gave up $1 or so. The crude oil markets were overshadowed by growing uncertainty over the outlook of the Chinese economy. But US crude oil inventories decreased for three consecutive weeks, raising worries over tightening supply-demand fundamentals. Crude prices wobbled day after day as bullish and bearish factors played a tug of war.

The actual highest price during the week was at Yen 21.38 in all of nine areas and the System Price (SP) for Jul 18 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Kyushu for Jul 17 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 13.01 in Hokkaido, down Yen 0.17 from the previous week, Yen 12.78 in Tohoku, down Yen 0.43, Yen 13.56 in Tokyo, down Yen 4.68, Yen 13.33 in Chubu, down Yen 3.46, Yen 11.83 in Hokuriku, Kansai and Chugoku, down Yen 4.42, Yen 11.42 in Shikoku, down Yen 3.76, and Yen 10.78, down Yen 5.13.

In the JEPX auction, volumes of offers were 1,173.61 mil kWh on a weekly average basis, up 16.7% from the previous week. Meanwhile, bids on a weekly average basis dwindled by 9.2% to 934.20 mil kWh. The weekly average of trade volumes waned by 1.4% to 744.20 mil kWh.

Power demand in nine areas of Japan during Jul 15-19 was a combined 12,847.86 mil kWh, down 4.2% from 13,44.97 mil kWh during Jul 8-12. The figure was down 5.5% from the corresponding period a year earlier. Demand during Jul 17-21, 2023 after day of week adjustment was 13,601.35 mil kWh.

In the JEPX forward market, no deals were confirmed during Jul 15-19.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Jul 15-19 were as below.

Deals reported on EEX (European Energy Exchange) during Jul 15-19 were as below.

In the fourth week of July, spot prices are believed to rise from the third week. The rainy season will come to an end in even more areas, and rising temperatures with sunlight will bring an extremely hot day throughout the week from Kyushu to southern Tohoku. Thus, air-conditioning demand is expected to remain brisk during the whole week, and give a bullish impact on spot prices. But several players are "negative about a possibility of price spikes", and regard as a guideline of the seasonal high the price of slightly above Yen 30 marked in the second week of July when severe summer heat gripped a wide range of areas. Ample fuel inventories led by gas and stable power supply from thermal units are putting a lid on spot prices. Spot prices are expected to have limited upside potential without any troubles at generation facilities in sizable capacity.