In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Oct 21-25 delivery recovered from the previous week in East Japan (50Hz), but eased back in West Japan (60Hz). In Tokyo, the temperatures marked the summer day indicator of 25 degrees throughout the week, giving a boost to air-conditioning demand. In Hokkaido, a sudden arrival of chilly climate stimulated heating demand. The temperature trends decoupled between Tokyo and Hokkaido, but growing demand in both areas pushed up spot prices in the overall East Japan. In West Japan, the temperatures stayed above 25 degrees widely, but sunshine was available mostly during the week and photovoltaic generation weighed on day time prices.

Meanwhile, many players stepped out of the market for the "Japan Power Week" in the week starting Oct 21, and power futures were thinly traded. On Oct 23, EEX and TOCOM jointly hosted the "Japan Power Summit 2024" in Tokyo. The event attracted 550 attendants from

more than 200 companies in Japan and overseas. In the keynote speech, the presenters mentioned the power futures markets had great potential to grow further. On the other hand, domestic power utilities in Japan are still unprepared to take measures against market risks. In a bid to utilize futures markets actively, the utilities are strongly recommended to facilitate internal systems and support will also be needed in terms of market systems at the same time.

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 3.62 for Oct 21 delivery, Yen 2.95 for Oct 22 delivery, Yen 2.91 for Oct 23 delivery, Yen 4.79 for Oct 24 delivery, and Yen 7.08 for Oct 25 delivery. The East-West gap widened from the previous week.

In the fuel markets, LNG and crude oil prices edged up while coal prices remained almost intact from the end of the previous week.

DES Northeast Asia spot LNG prices hovered in the mid $13 level per mmBtu for prompt December 2024 arrival as of Oct 24, up moderately about 10cts from the end of the previous week (Oct 18). A solidness in European natural gas prices lent support to the LNG market in Northeast Asia. But the rise in LNG prices was limited as Northeast Asia observed subdued buying interest from Japanese and South Korean end-users. The Ministry of Economy, Trade and Industry (METI) announced on Oct 23 that Japan's LNG inventories for power generation stood at 2.12 mil mt as of Oct 20, up 40,000mt from a week before. The level was down from 2.19 mil mt as of end-October last year, but up from the average of past five years at 2.02 mil mt.

FOB Newcastle thermal coal prices in Australia stood at slightly below $146 per ton for November 2024 loading as of Oct 24. The level was almost stable from the end of the previous week. The coal market observed a contango structure, with prices standing above $150 for January 2025 onward.

In the crude oil market, WTI crude for December 2024 stood in the mid $70 level as of the afternoon on Oct 25 while Brent crude for December 2024 was trading in the mid $74 level. Both WTI and Brent were up about $1.50 from the end of the previous week. Geopolitical risks in the Middle East continued to underpin crude futures. But the market's rise was pared by a large buildup in US crude oil inventories.

The actual highest price during the week was at Yen 21.18 in Hokkaido for Oct 22 delivery. Meanwhile, the actual lowest price during the week was at Yen 2.01 in Kyushu for Oct 23 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 14.61 in Hokkaido, up Yen 0.75 from the previous week, Yen 15.22 in Tohoku, up Yen 0.17, Yen 16.25 in Tokyo, up Yen 0.84, Yen 12.83 in Chubu, down Yen 0.50, Yen 11.98 in Hokuriku, Kansai and Chugoku, down Yen 1.25, Yen 11.89 in Shikoku, down Yen 1.22, and Yen 11.24 in Kyushu, down Yen 1.75.

In the JEPX auction, volumes of offers were 957.78 mil kWh on a weekly average basis, up 10.8% from the previous week. Meanwhile, bids on a weekly average basis increased by 0.9% to 915.81 mil kWh. The weekly average of trade volumes grew by 5.3% to 663.85 mil kWh.

Power demand in nine areas of Japan during Oct 21-25 was a combined 10,608.64 mil kWh, down 1.2% from 10,740.20 mil kWh during Oct 14-18. The figure was up 1.6% from the corresponding period a year earlier. Demand during Oct 23-27, 2023 after day of week adjustment was 10,445.09 mil kWh.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Oct 21-25 were as below.

Deals reported on EEX (European Energy Exchange) during Oct 21-25 were as below.

In the final week of October, spot prices are believed to stay in a tight range from the fourth week. The weather is forecast to remain changeable between sunny and cloudy repeatedly. The temperatures are forecast to be in the low 20 degrees in Kanto and around 25 degrees from Tokai to Kyushu. In West Japan, the temperatures are expected to rise to the summer day indicator of 25 degrees mostly during the week. In Kanto, post-summer heat will ease, so that waning demand is likely to put a lid on spot prices in East Japan. But demand in West Japan is expected to remain almost stable, spot prices will hover at similar levels as the fourth week. But the interconnection line between Tokyo and Chubu will have operating capacity slashed by nearly 1,000MW from normal rates of 2,100MW. Thus, price decoupling at the Tokyo-Chubu border is believed to take place intermittently, a factor that will likely push wider the price gap between East Japan and West Japan.