The coal price of origin has a slight correction and will stop falling and rebound in the short term. As of December 10, The pithead price of power lump coal (q6000) in Yulin, Shaanxi Province was 1250.0 yuan / ton, down 20.0 yuan / ton on a weekly basis; the pithead price of sticky coal (including tax) (q5500) in the southern suburbs of Datong was 904.0 yuan / ton, down 81.0 yuan / ton on a weekly basis; the wagon plate price of large clean coal in Dongsheng, Inner Mongolia (q5500) was 937.0 yuan / ton, down 19.0 yuan / ton on a weekly basis. The output of the main producing areas was generally stable this week, of which Inner Mongolia Eerduosi Resources Co.Ltd(600295) The daily output is about 2.7 million tons, at a high level. At present, the terminal inventory has been at a high level in the same period in recent years, but the inventory quality is not as good as before, and the downstream still needs to purchase; At the same time, with the Winter Olympics approaching, some small and medium-sized coal mines in northern Shanxi have stopped production since December 15, and the supply has contracted. Therefore, the coal price of origin will soon stop falling and rebound.
Ports around the Bohai Sea accelerated port dredging, and inventories fell. This week, 6569 trains arrived from Qinhuangdao Port Railway, with a weekly ring ratio increase of 12.12%; Qinhuangdao Port handled 469000 tons, a decrease of 8.75% over the previous week. The average weekly inventory level of China’s major ports (Qinhuangdao, Caofeidian and SDIC Jingtang Port) was 11.61 million tons, down 386000 tons from 11.9957 million tons last week, with a decrease of 3.22% on a weekly basis. As of December 9, the cargo ship ratio (inventory to ship ratio) of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 9.3 (a decrease of 0.75 on a weekly basis).
Downstream high inventory and weak demand, but the supply may narrow near the Winter Olympics, and the coal price is mainly stable. As of December 9, the coal inventory of the eight coastal provinces was 35.739 million tons, with a week on week increase of 2.193 million tons (6.54%), the daily consumption was 2.051 million tons, a week on week increase of 128000 tons / day (6.66%), and the available days were 17.4 days, which was flat on the week on month basis. As of December 10, the market price of Shanxi production of Qinhuangdao port power coal (q5500) was 1090.0 yuan / ton, which was flat on the week on month basis. International coal price, as of December 9, the spot price of power coal in Newcastle port was US $156.5/t, down US $3.84/t on a weekly basis. As of December 10, the active contract of thermal coal futures fell by 176.8 yuan / ton to 676.8 yuan / ton compared with the same period last week, and the futures discount was 413.2 yuan / ton. At present, the temperature in most parts of the country is higher than that in the same period of the year. Due to the environmental protection and production restriction of high energy consuming industries such as downstream steel coke, the daily consumption is lower than expected; At present, the coastal terminal inventory has significantly exceeded the level of the same period in previous years, but the inventory quality is not high; With the Winter Olympics approaching, small and medium-sized coal mines in northern Shanxi and other places may stop production. Under the restriction of supply, the coal price is mainly stable.
Coke: short-term supply and demand is loose, and the price is stable for the time being. As of December 10, 2021, Fenwei CCI, Luliang Zhun and metallurgical coke reported 2460 yuan / ton, unchanged on a weekly basis; CCI Rizhao quasi primary metallurgical coke reported 2750 yuan / ton, up 50 yuan / ton on a weekly basis. This week, the coke market temporarily operated stably, the shipments of coke enterprises in the origin continued to improve, the inventory in the plant continued to decline, at the same time, the coking profits were gradually repaired, the production load of some coke enterprises increased slightly, the market pessimism improved significantly, and considering the uneven distribution of profits in the industrial chain, coke enterprises had strong resistance to the increase and decrease. Due to the impact of environmental protection and production restriction and the increase of some shutdown and maintenance in the downstream steel plant, the rigid demand is restrained. On the whole, the loose pattern of coke supply and demand continues.
Coking coal: low price consolidation, medium and long-term scarcity is expected to be gradually reflected. As of December 9, CCI Shanxi low sulfur index was 2290 yuan / ton, flat on a week-on-week basis and down 1410 yuan / ton on a month-on-month basis; Shanxi’s high sulfur index was 1696 yuan / ton, flat on a weekly basis and down 1581 yuan / ton on a monthly basis; Lingshi fat coal index reported 1700 yuan / ton, flat on a week-on-week basis and down 1500 yuan / ton on a month-on-month basis; Puxian 1 / 3 coke index was 1650 yuan / ton, down 350 yuan / ton on a weekly basis and 1950 yuan / ton on a monthly basis. Coking coal prices remained stable this week. After the recent reduction of coking coal price, the profits of downstream coke enterprises have been repaired to some extent, the purchasing mood has improved, the production enthusiasm has improved, while the coal mine end sales have improved, and the short-term coal price is in a phased bottom consolidation. In the medium and long term, the newly-built coking coal mines are insufficient, the depletion of resources is becoming more and more prominent, the supply side will shrink significantly, and the price of supporting 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.
The central economic work conference, which closed on December 10, 2021, proposed to correctly understand and grasp the carbon peak and carbon neutralization from eight aspects: (1) realizing carbon peak and carbon neutralization is the internal requirement of promoting high-quality development, which should be unswervingly promoted, but it is impossible to complete its work in one service. (2) we should adhere to the principles of national overall planning, saving priority, two wheel drive, internal and external unimpeded and risk prevention. (3) The gradual withdrawal of traditional energy should be based on the safe and reliable substitution of new energy. (4) based on the basic national conditions of 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. (5) we should pay close attention to tackling key problems of green and low-carbon technologies. (6) Scientific assessment should be made to ensure that the new renewable energy and raw material energy consumption are not included in the total energy consumption control, create conditions to realize the transformation from “double control” of energy consumption to “double control” of total carbon emission and intensity as soon as possible, accelerate the formation of an incentive and restraint mechanism for reducing pollution and carbon, and prevent simple layer by layer decomposition. (7) to ensure energy supply, large enterprises, especially state-owned enterprises, should take the lead in ensuring supply and stable price. (8) We should further promote the energy revolution and speed up the construction of an energy power. We believe that the discussion on the dual carbon issue at the central economic work conference has opened up the space for coal demand that has always suppressed the market sentiment: first, the dual carbon goal is an internal requirement, which should be unswervingly promoted, but it is impossible to complete its work. The gradual withdrawal of traditional energy should be based on the safe and reliable development of new energy In other words, the energy consumption needed to ensure economic growth is the first, and the control of traditional energy consumption is the second; Second, create conditions to realize the transformation from “double control” of energy consumption to “double control” of total carbon emission and intensity as soon as possible, that is to say, controlling energy consumption is not the purpose, but the purpose is to control carbon emission. Making good use of traditional energy is also a green energy that encourages development; Third, the new renewable energy and raw material energy consumption will not be included in the total energy consumption control, which will also gradually improve the coal demand under the dual control of “energy consumption”. In addition, the central economic work conference reiterated the need to ensure energy supply, and large enterprises, especially state-owned enterprises, should take the lead in stabilizing prices and ensuring supply, which to a certain extent verified our judgment on the medium and long-term tightening of coal supply and demand. At present, it is still in the early stage of a new round of upward cycle of the coal situation. The underlying logic and direct effect of the policy are good for the repair and improvement of the valuation of the sector. Considering the certainty of the high growth of the industry’s performance in the fourth quarter and the first half of next year, this stage 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, underestimated value and high dividend thermal coal leader Yanzhou Coal Mining Company Limited(600188) , Shaanxi Coal Industry Company Limited(601225) , China Shenhua Energy Company Limited(601088) ; 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 stalled and declined sharply.
