Power: Jul 5-9: West extends rally on brisk buying to meet real demand
In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices for Jul 5-9 delivery rose further from the previous week in both East Japan and West Japan. Especially, West Japan posted a remarkable strength, pushing the East-West gap wider in favor of the West. In West Japan, spot prices were bolstered by growing buying interest to satisfy real demand, as the temperatures exceeded 30 degrees in a wide range of areas. Spot prices in West Japan also got a boost from limited solar power supply with persistent rainy weather across Japan throughout the week.
Kansai EPC restarted the 1,180MW No3 pressurized water reactor (PWR) at its Ohi nuclear power station in Fukui prefecture on Jul 3. The reactor's output reached above 100% capacity as of evening on Jul 8. Kansai EPC eyes sending the reactor under commercial operation at the end of July.
The actual highest price during the week was at Yen 17.73 in West Japan for Jul 8 delivery. The actual lowest price during the week was at Yen 5.89 in East Japan for Jul 5 delivery.
By area, the weekly average of the 24-hour spot prices was at Yen 7.75 in Hokkaido, down Yen 0.06 from the previous week, Yen 7.74 in Tohoku and Tokyo, up Yen 0.20, Yen 8.98 in Chubu, up Yen 1.08, Yen 8.98 in four areas including Hokuriku, Kansai, Chugoku and Shikoku, up Yen 1.09, and Yen 8.92 in Kyushu, up Yen 1.12.
Power demand in nine areas of Japan during Jul 5-9 was a combined 12,646.42 mil kWh, up 5.9% from 11,943.70 mil kWh during Jun 28-Jul 2. The figure was up 5.5% from the corresponding period a year earlier. Demand during Jul 6-10, 2020 after day of week adjustment was 11,984.35 mil kWh.
In the JEPX forward market, five transactions were reported on Jul 5, followed by one deal on Jul 7 and another two deals on Jul 9.
On Jul 5, the day-time contract (delivery during 08:00-18:00 hours on weekdays) in Tokyo saw five deals on a weekly delivery basis in 1MW each at Yen 16.20 for Jul 24-30, Yen 18.10 for Jul 31-Aug 6, Yen 17.68 for Aug 7-13, Yen 17.65 for Aug 14-20 and Yen 18.07 for Aug 21-27.
On Jul 7, the day-time contract in Tokyo changed hands on a weekly delivery basis, with 1MW fetching Yen 18.10 for Jul 31-Aug 6 delivery.
On Jul 9, the day-time contract in Tokyo witnessed two deals on a weekly delivery basis, with 1MW each transacted at Yen 19.15 for Aug 14-20 and Aug 21-27.
Deals reported on TOCOM (Tokyo Commodity Exchange) during Jul 5-9 were as below.
Deals reported on EEX (European Energy Exchange) during Jul 5-9 were as below.
During the week starting Jul 12, the highest temperature is expected to rise further. The day's high is forecast to reach 31-33 degrees day after day in West Japan. In East Japan, the day's high in Kanto will exceed 30 degrees in Kanto, a factor that is likely to give a boost to air-conditioning demand. Spot prices are believed to test higher territory on the back of stronger demand to fulfill real demand. Meanwhile, the rainy season may come to an end in the latter half of the week. Market players will be more cautious about a possible price spike as the summer season goes into full swing.