In the day-ahead market on JEPX (Japan Electric Power Exchange), the 24-hour spot power prices on a weekly average basis for Mar 17-21 delivery rebounded from the previous week in both East Japan (50Hz) and West Japan (60Hz). In contrast to mild spring climate throughout the previous week, a return of chilly climate across Japan through the middle of the week gave a boost to heating demand and jacked up spot prices. Especially on Mar 19, unseasonal snowfall was observed in Kanto, jacking up the peak demand in Tokyo to 46.89GW during 10:00-11:00 hours. As a result, utilization rates of generation facilities rose to 94%, leaving reserve rates as low as 5.8%. Meanwhile, mild spring climate revived on Mar 21, accelerating downside pressure on spot prices.

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 0.87 for Mar 17 delivery, Yen 0.46 for Mar 18 delivery and Yen 0.42 for Mar 20 delivery. East Japan outperformed West Japan by Yen 0.25 for Mar 19 delivery and Yen 0.35 for Mar 21 delivery.

The fuel market trends in the third week of March were detailed as follows.

DES Northeast Asia spot LNG prices stood in the low $13 per mmBtu for prompt May 2025 arrival as of Mar 19, falling back by about 20cts from the end of the previous week (Mar 14). A softness in European natural gas prices dragged down the LNG market in Northeast Asia. Besides that, slack buying interest from Northeast Asian end-users also weighed on LNG prices. The Ministry of Economy, Trade and Industry (METI) announced on Mar 19 that Japan's LNG inventories for power generation stood at 1.56 mil mt as of Mar 16, down 220,000mt from a week before. The figure was up from 1.48 mil mt as of end-March last year, but down from the average of past five years at 2.03 mil mt.

FOB Newcastle thermal coal prices in Australia stood in the mid $97 level per ton for March 2025 loading as of Mar 19. The level was down slightly less than $3 from the end of the previous week, in response to a weakness in gas prices.

In the crude oil market, WTI crude for April 2025 stood in the mid $68 level per barrel as of the morning on Mar 21 while Brent crude for May 2025 was trading in the low $72 level. Both WTI and Brent were up more than $1 from the end of the previous week. The crude oil market witnessed a tug of war between bullish and bearish factors. Crude futures found support from escalating geopolitical risks in the Middle East after US forces launched attacks on pro-Iran Houthi rebels. On the other hand, expectations loomed that geopolitical risks between Russia and Ukraine would be alleviated.

The actual highest price during the week was at Yen 41.49 in five areas in West Japan from Chubu to Shikoku for Mar 18 delivery. Meanwhile, the actual lowest price during the week was at Yen 0.01 in Shikoku and Kyushu for Mar 20-21 delivery and Chugoku as well for Mar 21 delivery.

By area, the weekly average of the 24-hour spot prices was at Yen 14.37 in Hokkaido, up Yen 2.88 from the previous week, Yen 13.22 in Tohoku, up Yen 2.37, Yen 13.36 in Tokyo, up Yen 2.06, Yen 13.56 in Chubu, up $1.45, Yen 13.59 in Hokuriku and Kansai, up $1.51, Yen 13.17 in Chugoku, up Yen 1.31, Yen 12.55 in Shikoku, up Yen 1.07, and Yen 11.11 in Kyushu, up Yen 0.37.

In the JEPX auction, volumes of offers were 1,233.60 mil kWh on a weekly average basis, down 10.4% from the previous week. Meanwhile, bids on a weekly average basis expanded by 8.4% to 1,045.21 mil kWh. The weekly average of trade volumes increased by 1.1% to 817.63 mil kWh.

Power demand in nine areas of Japan during Mar 17-21 was a combined 12,648.14 mil kWh, up 6.1% from 11,922.09 mil kWh during Mar 10-14. The figure was down 0.1% from the corresponding period a year earlier. Demand during Mar 18-22, 2024 after day of week adjustment was 12,658.24 mil kWh.

Deals reported on TOCOM (Tokyo Commodity Exchange) during Mar 17-21 were as below.

Deals reported on EEX (European Energy Exchange) during Mar 17-21 were as below.

In the fourth week of March, spot prices are expected to come under pressure. The highest temperature is forecast to stay above 20 degrees throughout the week from Kanto to Kyushu. A sharp drop in heating demand is likely to curb buying interest in the spot market. Meanwhile, output from photovoltaic generation will be sufficient through the middle of the week, so that spot prices in Kyushu and Shikoku have a high chance of hitting Yen 0.01 in broad time zones. A source at a power producer and supplier said, "The 24-hour average will likely hover near Yen 10 in both East Japan and West Japan''. Spot prices are believed to have limited upside potential in the middle of the non-peak demand period. But many thermal units are scheduled to halt operation for regular maintenance going forward, leaving reserve rates low. Thus, there is a chance of unexpected price hikes in case of unplanned troubles of generation facilities.