In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Aug 5-9 delivery lost ground from the previous week in both East Japan (50Hz) and West Japan (60Hz). In East Japan, heat waves eased from the previous week and the temperature fell below 35 degrees widely in Kanto. In addition, a buildup in power supply capped spot prices after JERA launched commercial operation at the 780MW new No1 unit at its Goi LNG-fired power station starting Aug 1. JERA also restarted the 1,000MW No1 unit at its Higashi Ohgishima LNG-fired power station on Aug 7 after completing regular maintenance that started in March. In West Japan, many areas continued to suffer extremely hot weather. Still, summer heat was alleviated a bit from the previous week. Output from photovoltaic generation also increased from the previous week, injecting bearishness into spot prices. Reflecting the temperature trends, the JEPX auction drew more volumes of offers than the previous week but shrinking bids, generating downside pressure on spot prices.

In Tokyo and Kansai, the key areas in East Japan and West Japan, the 24-hour average posted a difference in favor of the West by Yen 0.73 for Aug 5 delivery, Yen 1.16 for Aug 6 delivery, Yen 1.21 for Aug 7 delivery, Yen 1.56 for Aug 8 delivery, and Yen 1.31 for Aug 9 delivery.

In the fuel markets, LNG and coal prices climbed up from the end of the previous week. But crude oil prices lost ground.

DES Northeast Asia spot LNG prices hovered in the high $12 level per mmBtu for prompt September 2024 arrival as of Aug 8, up about 10cts from the end of the previous week (Aug 2). The LNG market found support from a strength in European natural gas prices, together with increasing gas demand in Northeast Asia amid persistent intense summer heat. The Ministry of Economy, Trade and Industry (METI) announced on Aug 7 that Japan's LNG inventories for power generation stood at 1.92 mil mt as of Aug 4, down from 2.14 mil mt a week before. The inventories fell below 2 mil mt for a first week in four. The level was down both from 1.94 mil mt as of end-July last year, but down from the average of past five years at 2.19 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the mid $145 level per ton for August 2024 loading as of Aug 8. The level was up about $1.50 from the end of the previous week, in response to a rise in gas prices.

In the crude oil market, WTI crude for September 2024 stood around $76 as of the morning on Aug 9 while Brent crude for October 2024 was trading around $79. Both WTI and Brent were down about $1 from the end of the previous week. At the beginning of the week, crude futures came under heavy selling pressure as global stock prices collapsed amid concerns over a slowdown in the US economy. But stock prices resisted a downward trend later in the week while US crude oil inventories decreased for a six straight week. Witch such bullish factors in sight, crude futures gradually pared the losses earlier in the week.

The actual highest price during the week was at Yen 35.10 in West Japan for Aug 9 delivery. Meanwhile, the actual lowest price during the week was at Yen 5.01 in Hokkaido and Tohoku for Aug 5 and Aug 6 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 13.53 in Hokkaido, up Yen 0.94 from the previous week, Yen 13.54 in Tohoku, up Yen 2.30, Yen 15.44 in Tokyo, down Yen 1.91, Yen 16.64 in Chubu, down Yen 1.63, Yen 16.62 in Hokuriku and Kansai, down Yen 1.53, Yen 16.63 in Chugoku, down Yen 1.47, Yen 16.79 in Shikoku, down Yen 2.83, and Yen 14.78 in Kyushu, up Yen 0.09. Shikoku still remained the highest among nine areas.

In the JEPX auction, volumes of offers were 1,221.13 mil kWh on a weekly average basis, up 1.9% from the previous week. Meanwhile, bids on a weekly average basis decreased by 0.7% to 1,122.95 mil kWh. The weekly average of trade volumes shrank by 2.1% to 831.08 mil kWh.

Power demand in nine areas of Japan during Aug 5-9 was a combined 14,736.76 mil kWh, down 0.4% from 14,789.19 mil kWh during Jul 29-Aug 2. The figure was up 6.9% from the corresponding period a year earlier. Demand during Aug 7-11, 2023 after day of week adjustment was 13,784.70 mil kWh.

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

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

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

In the third week of August, spot prices are expected to ease from the second week. Many factories are scheduled to enter the Obon break, so that a slowdown in power demand is likely to weigh on spot prices. Meanwhile, the temperatures in the third week are forecast to stay above the extremely hot day indicator of 35 degrees led by West Japan, but fall below 35 degrees in many parts of East Japan. In this sense, it is believed West Japan will continue to outperform East Japan, reflecting the temperature gap between both areas. Meanwhile, a source at a power producer and supplier noted, "Spot prices after the Obon break have a tendency to rise from the pre-Obon levels. Especially, intense summer heat persists this year. Fuel inventories led by gas are also digested well, so that we are keeping a close watch on the trend of fuel prices." As mentioned above, LNG inventories in Japan fell below 2 mil mt, and the future direction of fuel prices will be a key to monitor."