Market review this week:
CITIC coal index closed at 2785.9 points, up 13.9%, outperforming the Shanghai and Shenzhen 300 index by 13.1pct, ranking No. 1 in the list of 30 CITIC primary sectors.
Analysis of key areas:
Power coal: the policy pressure increased, and the coal price stopped rising and fell. As of Friday, the mainstream quotation of port q5500 was about 1010 yuan / ton, down 60 yuan / ton on a weekly basis. In terms of producing areas, the state-owned coal mines have basically resumed normal production after the festival. Most of the local coal mines are expected to return to normal after the 15th day of the first month, and the overall coal supply has picked up steadily; Due to policy pressure, coal mining enterprises began to reduce coal prices to near the price limit requirements on Thursday. In terms of the port, due to the price stabilization meeting held by relevant departments on Wednesday afternoon, the quotation of traders was reduced, and the mood of the port weakened. Although there was demand from downstream power plants, the wait-and-see mood gradually rose, the inquiry for goods decreased, the overall transaction was not much, the transfer out was less than the transfer in, and the inventory in Beigang increased slightly, but the accumulated inventory was less than expected. Downstream, under the cooling expectation, daily consumption is expected to rebound strongly. During the holidays, the daily consumption weakened as scheduled, but affected by low-temperature weather such as rain and snow, the power consumption of residents strengthened, and the power generation load of China Southern Power Grid was higher than that of the same period last year. From next week, with the influence of cold air and precipitation gradually unfolding, there will be a round of cooling process in the north; The rainy and snowy weather in the south is difficult to rest, mainly in wet and cold weather, and the consumption of coal and electricity for heating is expected to increase; Superimposed enterprises have resumed work and production, and daily consumption is expected to rebound strongly. In terms of import, the international demand for thermal coal in winter is still supported, and the coal price in Indonesia continues to rise; Considering that China’s port coal is lowered by policy pressure and the imported coal hangs upside down again, it will affect the subsequent coal import quantity to a certain extent. Overall, the current market supply is still tight. With the resumption of work and production of coal mines, the supply will gradually recover. There is a phased demand for replenishment in the downstream after the festival. In the later stage, with the arrival of the off-season in March, the demand is expected to weaken. After the price limit policy, the prices of coal mines and pitheads have decreased significantly, and the market is expected to weaken in the short term. In the later stage, pay attention to the resumption of production and price reduction of coal mines in the origin and the recovery of terminal demand. However, if the problem of low coastal inventory cannot be effectively solved, the coal price may rise again after the periodic decline.
Coking coal: short-term weak operation, which is expected to gradually strengthen after the Winter Olympics. After the festival, the resumption of production of coal mines in the main producing area of coking coal is fast, and under the influence of the decline of coke price and the production restriction of coke enterprises, the downstream coke enterprises mostly wait and see and suspend procurement, the shipment of coal mines is under pressure, the listing price is generally reduced, the price of bidding resources is also reduced, and the phenomenon of streaming auction is increasing. In terms of regions, Shanxi’s low sulfur main coking coal decreased by 300-650 yuan / ton, low sulfur lean coal decreased by 300-530 yuan / ton, high sulfur lean coal decreased by 200-300 yuan / ton, lean coal and lean coal decreased by 80-100 yuan / ton, and gas coal decreased by 58 yuan / ton. Gas coal in Zichang area of Shaanxi fell by 150 yuan / ton, and fat coal in Wuhai area of Inner Mongolia fell by 100-300 yuan / ton. As of Friday, the Shanxi main coke of Jingtang Port closed at 2830 yuan / ton, unchanged on a week-on-week basis. This week, after the Spring Festival, the coal mines in the main producing area of coking coal have gradually resumed production. Most of the coal mines have resumed normal production, the supply of coking coal market has increased, and some areas have stopped production due to heavy pollution weather warning. As for the import of Mongolian coal, due to the rebound of the epidemic situation in Mongolia, the customs clearance at Ganqi Maodu port remained low. According to sxcoal data, the customs clearance this week (2.7-2.10) lasted for 4 days, with an average of 76 vehicles per day, a decrease of 13 vehicles per day compared with the same period of the week before the festival; Due to the weak demand of China’s coking coal market, the wait-and-see mood is gradually rising, and the transaction in the port market is light. The mainstream quotation of Mongolian 5 raw coal is 2000-2050 yuan / ton. On the demand side, due to the impact of environmental protection policies, the market sentiment of coke and steel has weakened. Due to the relatively sufficient storage of raw coal in the plant, the downstream has low enthusiasm for raw coal procurement, mainly digesting the early inventory, and the price of coking coal is under pressure. The Winter Olympic Games ended on the 20th, and the blast furnace of the steel plant is expected to resume production in a small stage. At that time, the price of coking coal is expected to stop falling and gradually strengthen.
Coke: the second round of lifting, lowering and landing, short-term weak operation. This week, the second round of coke lifting and lowering landed (200 yuan / ton), with a cumulative lifting and lowering of 400 yuan / ton. On the supply side, during the Winter Olympics, the environmental protection policies in some regions became stricter, the production of coke enterprises was limited, the operating rate was mostly maintained at about 50%, and the coke output decreased regionally. On the demand side, the current production restriction policies are relatively strict, the overall operating rate of steel mills is low, and the blast furnaces of steel mills in some areas have been shut down. The downstream steel mills are less motivated to purchase, and some steel mills reduce the external purchase of coke and mainly go to the warehouse; At present, the coke supply is slightly loose, the coke enterprises have accumulated inventory in the plant, and the sales are slightly difficult. In addition, most of China’s coking coal shows a downward trend, the cost support of coke price is insufficient, and the steel mills are still willing to raise and lower. It is expected that the coke market may operate weakly in the short term.
Investment strategy. On February 9, the national development and Reform Commission and the National Energy Administration jointly held a meeting to arrange and deploy to continuously stabilize the coal market price, and interviewed and reminded some enterprises with falsely high coal prices found in the monitoring. The main purpose is to urge the coal mines to speed up the resumption of work and production after the festival and ensure the stability of coal prices, which is bound to have an impact on the market sentiment. However, considering that China’s output has basically reached the limit, and the import supply function is limited under the upside down import, and the short-term demand is slightly released, the coal price is easy to rise but difficult to fall. Only after entering the off-season of demand in March will coal prices show a seasonal downward trend. However, if the problem of low coastal inventory cannot be effectively solved, the coal price may rise again after the periodic decline. In addition, China will still be based on the basic national conditions dominated by coal, and traditional energy will not withdraw too soon. Under the background of limited space for tapping the potential of new production capacity and stock, the rise of coal price center will contribute to the stable release of performance and valuation repair of coal enterprises. In addition, the increase of Hong Kong coal stocks in this round is much higher than that of a shares, which also reflects that under the macro environment of the Federal Reserve’s interest rate hike, foreign capital pursues the target of high dividend, and the subsequent A shares are expected to catch up. Stick to the core assets and be optimistic about the valuation repair of high long-term association and high score red coal enterprises. Key recommendations: China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , Shaanxi Coal Industry Company Limited(601225) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) . In addition, the transformation of traditional energy enterprises under the goal of “double carbon” is worth looking forward to. The key recommendations are power investment energy (green power), Shan Xi Hua Yang Group New Energy Co.Ltd(600348) (energy storage), Huaibei Mining Holdings Co.Ltd(600985) (new materials, green power), Yankuang energy (new materials, green power), Shanxi Meijin Energy Co.Ltd(000723) (hydrogen energy) and China Xuyang group (hydrogen energy). Actively layout the national reform in Shanxi, focusing on Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Shanxi Coking Coal Energy Group Co.Ltd(000983) with expected asset injection.
Risk tip: China’s output release exceeded expectations, the downstream demand was less than expected, and the on grid electricity price was significantly reduced.
