Japan's spot power prices reach new winter high amid cold snap

Spot prices traded on the Japan Electric Power Exchange extended gains and rallied 10.9% day over day for March 4, with the 24-hour day-ahead price rising to Yen 18.86/kWh -- the highest level so far this winter amid the latest cold spell.

The March 4 JEPX prices surpassed the winter high of Yen 17.01/kWh for March 3, driven by higher contracted prices in the Chubu, Hokuriku, Kansai, Chugoku, Shikoku and Kyushu areas, following increased power demand caused by a drop in temperatures as the latest cold snap and snowfall hit the country.

Japan's LNG stocks held by major power utilities continued their decline, falling 3.5% week over week to a seven-week low of 1.94 million mt on Feb. 23, the Ministry of Economy, Trade and Industry said Feb. 26.

The LNG inventory was last lower Jan. 5 at 1.87 million mt, when Japan received fewer-than-usual LNG carriers due to the New Year holidays.

The latest LNG stock data compares with 2.18 million mt at the end of February 2024 and a five-year average of 2.18 million mt for the end of February.

Blizzards in China

The recent cold snap has also brought heavy snowfall to China, particularly in the central and eastern regions. Temperatures in some areas have dropped by as much as 18 degrees Celsius to negative territory.

According to the Central Meteorological Observatory (CMO), cold and blizzard conditions are expected to persist over the next two days.

China's trucked LNG prices were mixed on March 3. Some sellers continued to raise prices amid limited supplies, while others lowered prices as demand weakened following the recent continuous rise in prices.

Although the new cold snap is expected to boost heating demand, heavy snowfall and icy roads have also impeded LNG transportation in certain regions, sources said.