Coal prices rose strongly.
On February 21, the “three brothers” of coal rose sharply. As of the closing, the main contract of power coal futures rose by more than 6%, the main contract of coking coal rose by nearly 5%, and the main contract of coke rose by more than 3%, reaching a new high in recent four months.
On the A-share market, coal stocks generally closed up. As of the close, Shanxi Coking Coal Energy Group Co.Ltd(000983) (000983. SZ) and Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) (601699. SH) both rose 8.28%, leading the coal sector; Jizhong Energy Resources Co.Ltd(000937) (000937. SZ), Shanxi Coal International Energy Group Co.Ltd(600546) (600546. SH), Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) (600123. SH), Beijing Haohua Energy Resource Co.Ltd(601101) (601101. SH) and Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) (601001. SH) led the increase.
In terms of news, the price of thermal coal was under pressure due to the price limit policy last week, and some coal enterprises began to issue documents to reduce the price to less than 900 yuan. As the local regulatory authorities in Shanxi and Shaanxi have clearly implemented the price stabilization standard of the national development and Reform Commission, the price of origin has also quickly moved closer to the price limit standard. Industry insiders believe that with the end of the Winter Olympic Games and the passing of the most stringent period of the heating season, steel mills have stepped up the preparation of goods to deal with the resumption of production, boosted the purchase demand for coke, and the expectation of rising coal prices still exists.
Wu Jiarong, vice president and senior analyst of Moody’s credit, told China business that the high coal price put pressure on the credit rating of coal-fired power generation enterprises. He predicted that in the coming year, high coal prices will still pose a challenge to coal-fired power enterprises. On the one hand, most of the installed capacity of power generation enterprises is composed of coal-fired units. In the absence of an effective cost transfer mechanism, high coal prices will erode profitability and put pressure on their credit indicators.
coal price remains high
Since the beginning of the year, coal prices have continued to pick up.
The main contract of thermal coal futures has increased by 25% since the beginning of the year. The main contracts of coking coal and coke futures also increased by 18% and 15% respectively.
Rising coal prices also led to the performance of coal stocks, Pingdingshan Tianan Coal Mining Co.Ltd(601666) (601666. SH) and Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) 60 days increased by 61.74% and 58.43% respectively, significantly outperforming the market.
However, after a continuous sharp rise, the futures price of thermal coal is still significantly discounted. Under the influence of price limit policy, the high basis difference still strongly promotes the disk rebound. ITC futures commented that power plant bidding began to increase, and coastal power plants reduced coal consumption by reducing operating units, indicating a significant increase in the demand for replenishment. However, the liquidity of power coal futures decreased significantly under the condition of multiple guarantee and warehouse restriction, and investors are not recommended to participate.
In addition, since the night trading on February 21, Zheng Shang exchange has adjusted the minimum opening order quantity of thermal coal futures contract trading order to 2 hands, the maximum order quantity of limit order to 50 hands, and the maximum order quantity of market order to 10 hands.
In terms of spot goods, connect data datayes! It shows that the average price of spot coal increased by more than 20% in 2021, reaching 673 yuan / ton. Recently, coke enterprises opened the first round of 200 yuan / ton increase. According to Jiaolian information, some coke enterprises have started the first round of raising the downstream purchase price, with an increase of 200 yuan / ton. In terms of raw materials, some coke enterprises have a raw coal inventory of less than 5 days and purchase actively.
Kaiyuan Securities pointed out that in the short term, low temperature, rain and snow weather still support the daily consumption of the power plant, and the resumption of work in the downstream is accelerated. At the same time, the Winter Olympic Games is coming to an end, the power demand of some limited high energy consumption industries is expected to be released, and the overall coal consumption demand is still expected to be strong.
From the coal stock market, the stable price of the national development and Reform Commission has disturbed the market price, and the fundamentals of gaochangxie coal enterprises remain stable. The investment logic of the coal sector may mainly focus on the two main lines of “stable growth” and “transformation”. Under the background of carbon neutralization, the willingness of coal enterprises to increase production capacity has decreased significantly. In the future, coal prices will remain high and endogenous growth will be insufficient, but epitaxial growth will become the mainstream, and coal enterprises with high profits can make transformation.
Capital Securities predicts that the coal price in 2022 may be expected to maintain the annual average level in 2021, and the high performance level is expected to be maintained this year. At present, the listed companies of high-quality coal are generally at the low PE valuation level of 8 ~ 9 times. The performance of coal stocks in 2022 is expected to exceed the expectation, and the valuation will have a certain repair space.
profit pressure of coal and power enterprises
While the coal price is high, the operation and performance of enterprises in the coal industry chain are affected to varying degrees.
The first is the high coal price superimposed on the coal price limit policy, which makes the upstream coal enterprises reduce the price increment to a certain extent.
Previously, the national development and Reform Commission required that the pit price should be stabilized below 700 yuan and the port price should be stabilized below 900 yuan. Recently, the price of q5500 thermal coal in QinGang has also gradually decreased from 1160 yuan / ton at the end of January 2022 to 970 yuan / ton. However, the port is mainly shipped with changxiehe guaranteed supply coal, the coal supply in the market is insufficient, and the actual transaction basically stagnates.
According to the main operation data of January 2022 released by Shaanxi Coal Industry Company Limited(601225) (601225. SH) and China Coal Energy Company Limited(601898) (601898. SH) on February 15, the sales volume of commercial coal decreased by more than 20% year-on-year.
While coal sales fell in January, China’s coal prices began to rise sharply. According to the Bohai Rim thermal coal price index (bspi), in January 2022, although it has decreased by 14% compared with the peak price of 848 yuan / ton in October 2021, the average price of coal remains at the level of about 750 yuan / ton.
On February 9, the national development and Reform Commission and the National Energy Administration jointly held a meeting to arrange and deploy to continue to stabilize the coal market price, and interviewed and reminded some enterprises with falsely high coal prices found in the monitoring, requiring them to speed up the verification and rectification.
Li Yin of China Merchants Fund said that the key point affecting the profits of the coal industry lies in the fundamentals of supply and demand. At present, the annual demand growth of China’s coal exceeds the growth of the supply side, and the overall supply will be in a tight balance in the future.
On the basis of supply and demand, the current supplement of imported coal is limited, and the structural shortage of high calorie coal continues. Even after the festival, the coal mines began to resume work and production one after another, and the degree of supply recovery was limited.
In Li Yin’s opinion, the long-term association price is a better way to smooth the price. Too much price fluctuation is unfavorable to the operation of coal enterprises. The key to investing in coal stocks is good business operation and stable performance growth, rather than coal price speculation.
In addition, for downstream coal-fired power generation enterprises, coal prices remain high, significantly raising enterprise costs. Moody’s report shows that the high coal price increases the credit challenge of the evaluated coal-fired power generation enterprises.
It can be seen from the financial performance forecast of 2021 recently released by Beijing energy, China Resources Power, China Huadian and other enterprises that some enterprises disclosed that their profits fell sharply in 2021, while some enterprises suffered losses.
Wu Jiarong analyzed that for coal power enterprises, they are generally faced with the problem of high coal prices, and the industry lacks an effective cost transfer mechanism. These factors not only weaken the financial indicators of coal power enterprises, but also have a negative credit impact on the industry. At the same time, the industry is also facing the concentration of carbon transformation risks.
Specifically, the lack of effective and timely cost transfer mechanism is a major credit challenge faced by the evaluated coal and power enterprises. Wu Jiarong analyzed that the electricity price reform has enhanced the flexibility of coal-fired power enterprises to adjust the on grid electricity price and has a positive credit impact on Chinese power enterprises, but the credit indicators of power generation enterprises still need to be improved, because a large part of the coal-fired power generation market transaction price (MPS) contracts signed with power users will be renewed in 2022. In 2020, the market transaction electricity price accounts for about 70% of the total electricity sales of China’s coal power enterprises. Therefore, it is expected that the financial indicators of the evaluated coal and power enterprises will still be under pressure in 2022.
