In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Aug 26-30 delivery gained further ground from the previous week in both East Japan (50Hz) and West Japan (60Hz). Especially, West Japan extended a rally. For Aug 30 delivery, West Japan leaped to mark the Yen 40 level in several windows with a bullish impact from the typhoon No10. The 24-hour average stood at Yen 22.02 in Chubu and Yen 25.83 in five areas from Hokuriku to Kyushu. An approach of the typhoon No10 hindered port entry of LNG tankers, and power producers lowered output and suspended operation at several thermal units in Kyushu and Kansai in a bid to save fuel consumption. As a result, power producers squeezed offers in the spot market and growing buying interest pushed up spot prices remarkably.

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 1.75 for Aug 26 delivery, Yen 0.61 for Aug 27 delivery, Yen 1.88 for Aug 28 delivery, Yen 1.50 for Aug 29 delivery, and Yen 10.45 for Aug 30 delivery.

In the fuel markets, LNG and crude oil prices strengthened from the end of the previous week, while coal prices lost ground.

DES Northeast Asia spot LNG prices hovered at $14 per mmBtu for prompt September 2024 arrival as of Aug 29, up about 35cts from the end of the previous week (Aug 23). The LNG market found support from a solidness in European natural gas prices, together with production issues at the Australian and Malaysian projects. The Ministry of Economy, Trade and Industry (METI) announced on Aug 28 that Japan's LNG inventories for power generation stood at 2.06 mil mt as of Aug 25, up 130,000mt from a week before. The level was up both from 1.72 mil mt as of end-August last year and the average of past five years at 2.02 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the low $143 per ton for September 2024 loading as of Aug 29. The level was down about $1.50 from the end of the previous week. The coal market was outpaced by sell-offs after a recent winning streak. But the price fall was limited by firmer prices for gas and crude oil.

In the crude oil market, WTI crude for October 2024 stood in the low $76 level as of the morning on Aug 23 while Brent crude for October 2024 was trading in the low $78 level. Both WTI and Brent were up about $1.00 from the end of the previous week. Crude prices firmed up amid caution that a squeeze in Libyan crude oil would tighten up supply-demand fundamentals. But the market's rise was limited by profit-taking amid high price concerns. Crude futures were also overshadowed by jitters over a slowdown in the US economy.

The actual highest price during the week was at Yen 45.00 in West Japan for Aug 30 delivery. It was the highest price since Yen 50.00 marked in seven areas from Tokyo to Kyushu for Sep 21, 2023. Meanwhile, the actual lowest price during the week was at Yen 9.29 in Hokkaido for Aug 27 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 14.40 in Hokkaido, up Yen 0.67 from the previous week, Yen 15.42 in Tohoku, up Yen 0.85, Yen 15.59 in Tokyo, down Yen 0.06, Yen 17.96 in Chubu, up Yen 1.06, Yen 18.63 in Hokuriku, Kansai, Chugoku and Shikoku, up Yen 1.68, and Yen 18.22 in Kyushu, up Yen 2.45.

In the JEPX auction, volumes of offers were 1,137.76 mil kWh on a weekly average basis, down 3.7% from the previous week. Meanwhile, bids on a weekly average basis waned by 0.9% to 1,089.56 mil kWh. The weekly average of trade volumes shrank by 4.5% to 769.96 mil kWh.

Power demand in nine areas of Japan during Aug 26-30 was a combined 13,420.67 mil kWh, down 6.5% from 14,355.49 mil kWh during Aug 19-23. The figure was down 4.9% from the corresponding period a year earlier. Demand during Aug 28-Sep 1, 2023 after day of week adjustment was 14,105.24 mil kWh.

In the JEPX forward market, no deals were confirmed during Aug 26-30.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Aug 26-30 were as below.

Deals reported on EEX (European Energy Exchange) during Aug 26-30 were as below.

In the first week of September, midday prices are expected to come under pressure. In the final week of August, solar power supply was limited in the aftermath of the typhoon. But in the first week of September, sunshine will be expected throughout the week in West Japan. East Japan is also forecast to turn sunny in the middle of the week, so that photovoltaic generation is believed to put a lid on spot prices. The highest temperature in the first week of September is forecast to be at 32-35 degrees in West Japan and 30-33 degrees in East Japan. The levels can create solar power supply to some extent, but will not be high enough to impact the price trends. Higher temperatures in West Japan are likely to keep the East-West price spread in a reverse pattern in favor of the West even in September. Meanwhile, an increasing number of thermal units are scheduled to halt operation for regular maintenance from the beginning of September, and reserve rates are expected to track a downward trend. In case of any pickup in demand tied to unit troubles or high temperatures, spot prices could have a chance to show unexpected spikes.