In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Sep 2-6 delivery fell back from the previous week in both East Japan (50Hz) and West Japan (60Hz). Especially, West Japan deepened falls and underperformed East Japan throughout the week. Intense summer heat was expected to linger in September. But in West Japan, heat waves were alleviated from August with extremely high temperatures above 35 degrees in August, generating downside pressure on spot prices. In East Japan as well, the highest temperature sometimes fell below 30 degrees, and a slowdown in air-conditioning demand put a lid on spot prices.

JEPX awarded the first batch of its one-year base load auction for delivery in the fiscal year 2025 on Aug 30. The auction was awarded at Yen 15.60 in 41MW in Tokyo, Yen 12.97 in 14.8MW in Kansai and Yen 13.41 in 0.3MW in Kyushu. Trade volumes were limited across the areas. Following the auction, the European Energy Exchange (EEX) observed active trades on Summer (April-September) and Winter (October-March) 2025 in combination. Those seasonal contracts fetched lower price than the base load auction.

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 1.94 for Sep 2 delivery, Yen 0.67 for Sep 3 delivery, Yen 1.85 for Sep 4 delivery, Yen 1.46 for Sep 5 delivery, and Yen 1.98 for Sep 6 delivery.

In the fuel markets, LNG and crude oil prices deepened losses from the end of the previous week.

DES Northeast Asia spot LNG prices hovered in the mid $13 per mmBtu for prompt September 2024 arrival as of Sep 5, down about 70cts from the end of the previous week (Aug 30). European natural gas prices fell back, snapping its recent upward trend, and the LNG market in Northeast Asia also followed suit. Furthermore, LNG prices were unaided by ongoing slack buying interest from end-users. The Ministry of Economy, Trade and Industry (METI) announced on Sep 4 that Japan's LNG inventories for power generation stood at 1.83 mil mt as of Sep 1, down 230,000mt from a week before. The drawdown came as the typhoon No10 hindered many LNG tankers from entering the discharging ports. The level was up from 1.72 mil mt as of end-August last year, but down from the average of past five years at 2.02 mil mt.

FOB Newcastle thermal coal prices in Australia stood at $141 per ton for September 2024 loading as of Sep 5. The level was down about $1.00 from the end of the previous week, mirroring a softness in gas and crude oil prices.

In the crude oil market, WTI crude for October 2024 stood in the mid $69 level as of the morning on Sep 6 while Brent crude for November 2024 was trading in the high $72 level. Both WTI and Brent were down about $4.00 from the end of the previous week. Bearish factors dominated the market throughout the week, boosting downside pressure on crude oil prices. The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC, or OPEC plus, showed readiness to phase out the voluntary production cuts from October onward as planned. Furthermore, supply woes over Libyan crude oil were alleviated while concerns grew over an economic slowdown in US and China.

The actual highest price during the week was at Yen 22.00 in West Japan for Sep 3 delivery. Meanwhile, the actual lowest price during the week was at Yen 3.00 in Kyushu for Sep 2 delivery and Hokkaido for Sep 3 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 12.18 in Hokkaido, down Yen 2.22 from the previous week, Yen 13.51 in Tohoku, down Yen 1.91, Yen 14.05 in Tokyo, down Yen 1.54, Yen 13.49 in Chubu, down Yen 4.47, Yen 12.47 in Hokuriku, Kansai, Chugoku and Shikoku, down Yen 6.16, and Yen 11.34 in Kyushu, down Yen 6.88.

In the JEPX auction, volumes of offers were 1,246.07 mil kWh on a weekly average basis, up 9.5% from the previous week. Meanwhile, bids on a weekly average basis dwindled by 9.8% to 983.09 mil kWh. The weekly average of trade volumes decreased by 1.3% to 759.67 mil kWh.

Power demand in nine areas of Japan during Sep 2-6 was a combined 13,259.55 mil kWh, down 1.2% from 13,420.68 mil kWh during Aug 26-30. The figure was up 0.5% from the corresponding period a year earlier. Demand during Sep 4-8, 2023 after day of week adjustment was 13,188.14 mil kWh.

In the JEPX forward market, no deals were confirmed during Sep 2-6.

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

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

In the second week of September, spot prices are likely to rise moderately from the first week. The highest temperature is expected around 35 degrees in a wide range of areas in West Japan mostly during the week. In East Japan as well, the day's high is forecast to be around 35 degrees from the middle of the week onward, a factor that is believed to stimulate spot buying. But ample output from photovoltaic generation is expected throughout the week. Thus, spot prices during midday (08:00-16:00 hours) will likely have limited upside room and post a wider gap against evening hours onward. In addition, a slightly increasing number of thermal units are scheduled to halt operation for regular maintenance, and it is also cited a bullish factor for spot prices.