In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Apr 1-5 delivery, or the kick-off week in the new fiscal year, softened from the previous week in both East Japan and West Japan. Mild spring climate throughout the week hammered down heating demand, putting a lid on spot power prices. But a source at a power producer and supplier said, "Spot prices look a bit overdone, judging from weather conditions." The firmness came as power reserve rates are low with many thermal units off line for regular maintenance. A source at another power producer and supplier noted, "In the new fiscal year, many players are believed to be depending more heavily on spot purchases, so that we will see high volatility." Spot prices can show choppy movements in case of a slight change in weather conditions or facility troubles.

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 3.36 for Apr 1 delivery, Yen 1.84 for Apr 2 delivery, Yen 0.40 for Apr 4 delivery and Yen 0.60 for Apr 5 delivery. For Apr 3 delivery, the gap was at Yen 0.23 in favor of the West.

In the fuel markets, LNG and coal prices eased moderately from the previous week. Crude oil prices gained ground.

DES Northeast Asia spot LNG prices hovered in the low $9 level per mmBtu for prompt May 2024 arrival as of the latter half of the week (Apr 4), down moderately by about 20cts from the end of the previous week (Mar 29). Demand for power generation slowed down amid rising temperatures, especially when the peak-demand winter season came to an end. The Ministry of Economy, Trade and Industry (METI) announced on Apr 3 that Japan's LNG inventories for power generation stood at 1.48 mil mt as of Mar 31, down 40,000mt from the previous week. The level was far below 2.33 mil mt as of end-March last year and the average of past five years at 2.14 mil mt.

FOB Newcastle thermal coal prices in Australia hovered in the high $128 level per ton for April 2024 loading as of the latter half of the week. The level was down nearly $4 from the end of the previous week, mirroring a dip in gas prices.

In the crude oil market, WTI crude for May 2024 stood in the high $86 level as of morning on Apr 5 while Brent crude for June 2024 was trading in the high $90 level. Both WTI and Brent were up $3-4 from the end of the previous week. The crude oil markets found support from an improvement in economic indexes in US and China, on top of growing geopolitical risks in the Middle East and Ukraine.

The actual highest price during the week was at Yen 22.35 in seven areas from Tokyo to Kyushu for Apr 3 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in eight areas excluding Tokyo as well as the System Price (SP) for Apr 1 and Apr 2 delivery, Hokkaido and Tohoku for Apr 3 delivery, Shikoku for Apr 4 delivery, and Hokkaido, Tohoku and Shikoku for Apr 5 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 9.14 in Hokkaido, down Yen 4.67 from the previous week, Yen 8.63 in Tohoku, down Yen 4.61, Yen 10.99 in Tokyo, down Yen 2.29, Yen 10.09 in Chubu, down Yen 1.23, Yen 9.80 in Hokuriku, down Yen 0.93, Yen 9.80 in Kansai and Chugoku, down Yen 0.57, Yen 9.32 in Shikoku, down Yen 0.99, and Yen 9.80 in Kyushu, down Yen 0.20.

In the JEPX auction, volumes of offers were 1,067.38 mil kWh on a weekly average basis, up 13.9% from the previous week. Meanwhile, bids on a weekly average basis shrank by 7.3% to 840.45 mil kWh. The weekly average of trade volumes waned by 0.6% to 643.10 mil kWh.

Power demand in nine areas of Japan during Apr 1-5 was a combined 10,847.14 mil kWh, down 8.4% from 11,837.90 mil kWh Mar 25-29. The figure was up 2.2% from the corresponding period a year earlier. Demand during Apr 3-7, 2023 after day of week adjustment was 10,613.11 mil kWh.

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

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

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

In the second week of April, spot power prices are expected to stay in a similar range as the first week. Relatively mild climate is expected to continue, and power demand will remain at the low ebb amid little chance to use heaters or air-conditioners. But the weather is forecast to remain cloudy in the first half of the week across Japan. Limited scope for photovoltaic generation is believed to help spot prices escape from extreme lows such as Yen 0.01. On the other hand, sunshine will be available from the middle of the week onward, so that Kyushu, Shikoku and Tohoku that are heavily equipped with solar generation facilities have a chance to hit Yen 0.01 even on weekdays.