In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Dec 2-6 delivery lost further ground from the previous week in both East Japan (50Hz) and West Japan (60Hz). The temperatures stayed higher than normal across Japan while sunshine was available mostly during the week with ample output from photovoltaic generation. In addition, an increasing number of thermal units returned from regular maintenance, adding bearishness to spot prices. On top of that, many retail players were hedged with bilateral OTC deals, and a lower dependency on the spot market also boosted downside pressure on spot prices.

Elsewhere, a series of nuclear reactors were coming back on stream.

Kyushu EPC resumed power generation at the 890MW No2 PWR (Pressurized Water Reactor) at its Sendai nuclear power station in Kagoshima prefecture on Nov 30. The reactor was off line for regular maintenance since Sep 14 and was reactivated on Nov 28. Tohoku EPC reactivated the 825MW No2 BWR (Boiling Water Reactor) at its Onagawa nuclear power station in Miyagi prefecture at 6:00 hours on Dec 5. Tohoku tentatively reactivated the reactor on Nov 13, and sent the reactor under an intermediate shutdown starting Nov 24 in a bid to confirm safety of key facilities and conduct inspections and cleaning inside of the condenser. Furthermore, Chugoku EPC plans to reactivate the 820MW No2 BWR (Boiling Water Reactor) at its Shimane nuclear power station in Shimane prefecture on Dec 7 following regular maintenance started on Jan 27, 2012. After the reactivation, the reactor will resume power generation in late December following an intermediate shutdown, and launch commercial operation in early January next year.

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 2.15 for Dec 2 delivery, Yen 1.44 for Dec 3 delivery, Yen 1.18 for Dec 4 delivery, Yen 1.38 for Dec 5 delivery, and Yen 2.16 for Dec 6 delivery.

In the fuel markets, LNG and crude oil prices rose moderately from the end of the previous week while coal prices turned lower.

DES Northeast Asia spot LNG prices hovered in the high $14 per mmBtu for prompt January 2025 arrival as of Dec 5, up about 10cts from the end of the previous week (Nov 29). A firmness in European natural gas prices underpinned the LNG market in Northeast Asia. But the gain in LNG prices was limited by an unabated supply glut in Northeast Asia. The Ministry of Economy, Trade and Industry (METI) announced on Dec 4 that Japan's LNG inventories for power generation stood at 1.89 mil mt as of Dec 1, down 170,000mt from a week before. The figure was way down both from 2.70 mil mt as of end-December last year and the average of past five years at 2.16 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the low $133 level per ton for December 2024 loading as of Dec 5. The level was down about $4 from the end of the previous week, pressured by loosening supply-demand fundamentals.

In the crude oil market, WTI crude for January 2025 stood in the low $68 level as of the morning on Dec 6 while Brent crude for February 2025 was trading at slightly above $72. Both WTI and Brent were up about $3 from with the end of the previous week. Crude futures found support from expectations that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, or OPEC plus, would postpone its planned output hike from the original plan to do starting January. The outlook for an economic recovery in China also served as a bullish factor. But the rise in crude prices was pared by cautious selling amid looming high price concerns.

The actual highest price during the week was at Yen 21.00 in Tokyo and Chubu for Dec 6 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Shikoku and Kyushu for Dec 2 delivery, Kyushu for Dec 3-4 delivery and Shikoku for Dec 5 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 12.42 in Hokkaido, down Yen 1.85 from the previous week, Yen 12.23 in Tohoku, down Yen 2.21, Yen 13.79 in Tokyo, down Yen 1.24, Yen 13.79 in Chubu, down Yen 0.37, Yen 12.13 in Hokuriku, down Yen 0.56, Yen 12.13 in Kansai and Chugoku, down Yen 0.55, Yen 9.60 in Shikoku, down Yen 2.17, and Yen 10.81 in Kyushu, down Yen 1.32.

In the JEPX auction, volumes of offers were 1,116.31 mil kWh on a weekly average basis, up 20.0% from the previous week. Meanwhile, bids on a weekly average basis grew by 4.0% to 972.75 mil kWh. The weekly average of trade volumes expanded by 10.1% to 781.05 mil kWh.

Power demand in nine areas of Japan during Dec 2-6 was a combined 11,993.04 mil kWh, up 1.8% from 11,778.75 mil kWh during Nov 25-29. The figure was down 4.6% from the corresponding period a year earlier. Demand during Dec 4-8, 2023 after day of week adjustment was 12,568.28 mil kWh.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Dec 2-6 were as below.

Deals reported on EEX (European Energy Exchange) during Dec 2-6 were as below.

In the second week of December, spot prices are expected to chase upside. The temperatures are forecast to drop sharply across Japan, and a pickup in heating demand will likely digest excess power and help tighten up supply-demand fundamentals. With the tighter supply outlook, many players are actively trading weekly contracts for price hedging in the power futures markets. But an increasing number of thermal units are back in operation after regular maintenance, so that only a limited of number of players are worried about excessive price hikes.