Summary of this issue:
The policy price limit led to the callback of coal price of origin. As of February 11, the pithead price of Shaanxi Yulin power lump coal (q6000) was 1110.0 yuan / ton, down 25.0 yuan / ton on a weekly basis, up 550 yuan / ton over the same period last year; The pit mouth price of sticky coal (including tax) (q5500) in the southern suburb of Datong was 920.0 yuan / ton, down 15.0 yuan / ton on a weekly basis, an increase of 370 yuan / ton over the same period last year; Inner Mongolia Dongsheng large clean coal truck sector price (q5500) was 910.0 yuan / ton, down 18.0 yuan / ton on a weekly basis, up 453 yuan / ton over the same period last year. This week, the coal mines in the producing area began to resume work one after another, but the output and Inventory were low, the demand for downstream chemicals and platforms increased, and the coal price rose slightly. After the policy price limit in the middle of the week, the coal price was callback one after another. It is expected that the coal price at the pit mouth will remain stable in the short term.
The port inventory increased and the downstream transportation was active. This week, there were 6949 trains arriving at Qinhuangdao Port Railway, an increase of 2358 compared with the week before the Spring Festival, and the weekly ring ratio increased by 51.36%; Qinhuangdao Port handled 442000 tons, an increase of 75000 tons compared with the week before the Spring Festival, an increase of 20.44% on a weekly basis. As of February 11, the inventory of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 10.41 million tons (an increase of 98000 tons compared with the week before the Spring Festival), the number of anchor ships was 133.0 (an increase of 13.00 compared with the week before the Spring Festival), and the cargo ship ratio (inventory to ship ratio) was 7.8 (a decrease of 0.03 compared with the week before the Spring Festival).
International coal prices soared and the price advantage of imported coal disappeared. As of February 10, the coal inventory of eight coastal provinces was 31.5 million tons, with a decrease of 156000 tons on a weekly basis (a decrease of 0.49%), the daily consumption was 1414000 tons, a rise of 164000 tons / day on a weekly basis (13.12%), and the available days were 22.3 days and a decrease of 3.00 days on a weekly basis. As of February 11, the market price of Qinhuangdao port thermal coal (q5500) produced in Shanxi was 1010.0 yuan / ton, unchanged on a weekly basis. International coal price: as of February 10, the spot price of power coal in Newcastle port was 247.2 US dollars / ton, up 25.57 US dollars / ton on a weekly basis. As of February 11, the active contract of thermal coal futures rose 66.4 yuan / ton to 822.6 yuan / ton compared with the same period last week, and the futures discount was 187.4 yuan / ton. Recently, the national development and Reform Commission held a meeting to further promote the resumption of work and production of coal mines and speed up the release of production capacity. It is expected that after the 15th day of the first month, the coal mines in the place of origin that have not resumed work will resume production; However, affected by the Winter Olympics, the supply in northern Shanxi will continue to be limited. Meanwhile, there will be obvious snowfall in North China next week, which will have an impact on coal production and transportation, and the temperature in most of the south is about 2 ℃ lower than that in the same period of the year; With the increase of industrial power consumption, the coal consumption of power plants will continue to increase; At the same time, the international coal price soared, the price advantage of imported coal disappeared, and the downstream is expected to increase China’s coal procurement demand, supporting the port coal price to remain strong.
Coke: coke has dropped by 400 yuan / ton in two rounds, and the short-term fundamentals are still weak. As of February 10, 2022, Fenwei CCI Luliang quasi primary metallurgical coke reported 2560 yuan / ton, with a decrease of 13.5% on a weekly basis, 13.5% on a monthly basis and 3.4% on a year-on-year basis. Port index: CCI Rizhao quasi first grade metallurgical coke reported 2880 yuan / ton, down 5.6% on a weekly basis and 8% on a monthly basis, the same as the same period last year. During the Winter Olympic Games, the disturbance of environmental protection and production restriction at the origin was frequent, and the production restriction at both ends of steel coke was limited. However, the production restriction of steel mills was significantly stronger than that of coke enterprises. In addition, the raw material inventory of steel mills was sufficient, and they mostly purchased on demand or even digested the inventory, which affected the accumulation of coke enterprises in some regions to varying degrees. In addition, the cost side support of coke weakened synchronously, and the short-term coke fundamentals were still weak.
Coking coal: short-term price pressure, medium and long-term scarcity is expected to gradually highlight. As of February 10, CCI Shanxi low sulfur index was 2545 yuan / ton, down 210 yuan / ton on a weekly basis and 100 yuan / ton on a monthly basis, up 979 yuan / ton on a year-on-year basis; CCI Shanxi high sulfur index was 2208 yuan / ton, down 115 yuan / ton on a weekly basis, up 100 yuan / ton on a monthly basis, up 1033 yuan / ton on a year-on-year basis; Lingshi fat coal index was 2350 yuan / ton, unchanged on a weekly basis, with a month on month increase of 150 yuan / ton and a year-on-year increase of 1200 yuan / ton; Puxian 1 / 3 coke index was 1900 yuan / ton, down 400 yuan / ton on a weekly basis and flat on a monthly basis, with a year-on-year increase of 670 yuan / ton. This week, China’s coking coal market operated steadily and weakly. As most coal mines in the production area have resumed production, the supply has gradually returned to the normal level, and the downstream wait-and-see mood is strong, the demand for raw coal is weak, some coal types in the coal mine have accumulated to varying degrees, the shipping pressure of coal mines has increased, and the prices of some coal types have fallen. In the medium and long term, the newly-built coking coal mines are insufficient, the depletion of resources is becoming more and more prominent, and the supply side will shrink significantly, supporting that the price of coking coal is easy to rise but difficult to fall; With the change of demand structure for coking coal due to the large-scale blast furnace and coke oven, high-quality coking coal (main coke, fat coal, etc.) resources are more scarce.
We believe that at present, we are in the early stage of a new round of upward cycle of coal economy, and the fundamentals, policies and companies resonate. At this stage, the allocation of coal sector is at the right time. With the adjustment of industrial structure and the rapid growth of residents’ domestic energy consumption, the demand for energy in current social development is becoming more and more rigid, rather than the limited output of fossil energy, and the demand for coal is expected to gradually increase with economic growth; At present, the new capital expenditure on the coal supply side is weak, and the depletion of resources in old mining areas is accelerating. Considering the decline of coal enterprises’ willingness and ability to build mines and the construction cycle of more than 5 years, the coal supply may be difficult to respond to the demand growth during the 14th Five Year Plan period, and the price will remain high. Under the general cost reduction, efficiency increase and endogenous extension growth of the industry, the enterprise profit is expected to rise. At the same time, the coal related policies tend to be loose. On November 17, 2021, the national standing committee decided to establish a 200 billion refinance to support the clean and efficient utilization of coal; Subsequently, the central economic work conference in December reiterated that “based on the basic national conditions dominated by coal, we should pay attention to the clean and efficient utilization of coal, increase the consumption capacity of new energy, and promote the optimal combination of coal and new energy.” At the same time, relaxing the dual control of energy consumption of raw coal and delaying the carbon peak time of iron and steel industry are beneficial to the long, medium and short-term demand for coal. In addition, in the upward trend of the industry boom, the leading coal enterprises rely on their own resources / capital / technology endowment advantages to promote the energy revolution, layout transformation and upgrading, new growth poles or repay shareholders, and can improve the income level of investors in the long term. At this stage, the industry fundamentals, the underlying logic of the policy and the direct effect are favorable for the repair and improvement of the valuation of the sector. Considering the certainty of the high growth of performance in the first half of this year, it is the best stage for bargain hunting to allocate the coal sector.
Investment rating: we continue to look at the coal sector in an all-round way and continue to suggest paying attention to the historic allocation opportunities of coal. It is suggested to pay attention to three main investment lines: first, Yankuang energy, Shaanxi Coal Industry Company Limited(601225) , China Shenhua Energy Company Limited(601088) , which is the leader of low value and high dividend power coal; Second, Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Guizhou Panjiang Refined Coal Co.Ltd(600395) with both scarcity of resources and significant growth; Third, the Shanxi Coking Coal Energy Group Co.Ltd(000983) and Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) with great extension expansion potential brought by the improvement of asset securitization rate of state-owned coal group.
Risk factors: coal mine safety production accidents in key companies; The macro economy has fallen sharply.
