The central economic work conference emphasizes “coal based”, and the downstream of non electricity is expected to usher in rapid development. The central economic work conference held on December 8-10 proposed: “based on the basic national conditions dominated by coal, we should increase the consumption capacity of new energy and promote the optimal combination of coal and new energy… The new renewable energy and raw material energy consumption will not be included in the total energy consumption control”. We believe that, first of all, this meeting has made it clear that the status of coal as a basic energy will not be shaken, and at the current stage, it is not a simple coal withdrawal, but “clean and efficient utilization of coal”, mainly including CBM utilization, coal chemical industry, coal based special fuels, coal based biodegradable materials, etc. Secondly, about half of the downstream of the coal industry is consumed by thermal power, and the remaining downstream steel, building materials and chemical industry are used as raw materials. After the raw material energy consumption is not included in the total energy consumption control, the non electric downstream of coal is expected to achieve high-speed development.
The price of thermal coal is under pressure in the short term, and the long-term profit center is expected to improve. According to the coal resources network, the supply side mines maintain a relatively high operating rate, but the downstream procurement rhythm slows down, and the market transactions are cold. On the one hand, the power plant inventory has exceeded the same period last year, but the rising range and rhythm of daily consumption are lower than expected. On the other hand, the market is waiting for the order meeting and the final long-term agreement price, and the inventory is high, The downstream takes a wait-and-see attitude, so the short-term price faces downward pressure. However, in the long run, the benchmark price of the long-term association in the draft for comments on the signing and performance scheme of long-term coal contract in 2022 is raised to 700 yuan / ton, which can reflect the reasonable price center acceptable to both sides of coal and electricity. If this price is implemented, the profit center of the industry is expected to increase.
The supply and demand pattern of coke market has improved, and the price is expected to be stable. According to the coal resources network, the overall supply side operated at a low level this week, and the inventory in the plant continued to decline. On the demand side, the winter storage of the steel plant is approaching, and the purchasing enthusiasm of the steel plant has been improved. In addition, under the background that the profit of the steel plant is higher than that of the coke, the coke plant has a strong willingness to support the price, but the shutdown and maintenance of the boiler in winter increases, the hot metal output continues to decline, and the demand for coke is limited. Therefore, on the whole, the coke price is expected to be stable.
The price of some coking coals picked up. According to the coal resource network, the supply side remained high and stable, and the coke operating rate on the demand side did not increase significantly. However, due to the improvement of winter storage demand and profit, the downstream procurement improved, which led to the recovery of some coal prices, and the overall coking coal market improved.
Investment suggestions: 1) under the dual carbon target, we suggest to pay attention to the target Shanxi Blue Flame Holding Company Limited(000968) of methane emission reduction and the power investment energy of new energy transformation. 2) The benchmark price of the long-term association price rises, and companies with a high proportion of the long-term association are expected to benefit. It is recommended to pay attention to China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) and Shaanxi Coal Industry Company Limited(601225) .
Risk tip: risk of economic slowdown; Risk of sharp decline in coal prices; Risk of policy change.
