Spot coal prices rose further last week and have continued to exceed expectations since the beginning of the year. Superimposed on factors such as the sharp rise in overseas energy prices and the relaxation of real estate policies, the market’s expectation of the industry’s annual prosperity continues to rise, and the rising space of the sector is expected to expand.
Last week, the sector outperformed the index, and the futures price rose in an all-round way. Last week (as of March 4, the same below), the yield of CITIC coal primary industry index was 9.95%, outperforming the Shanghai and Shenzhen 300 index by 11.64pcts The top five stocks in the week were Yunnan Coal & Energy Co.Ltd(600792) (+ 32.72%), Beijing Haohua Energy Resource Co.Ltd(601101) (+ 27.24%), Shanxi Coal International Energy Group Co.Ltd(600546) (+ 22.44%), Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) (+ 19.82%) and Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) (+ 17.65%). Last week, zc2205, the main force of thermal coal futures, reported 852.2 yuan / ton (compared with the previous week + 14.39%), jm2205, the main force of coking coal futures, reported 2868.5 yuan / ton (compared with the previous week + 14.21%), and J2205, the main force of coke futures, reported 3585.0 yuan / ton (compared with the previous week + 12.63%).
Coal prices generally rose, and the quotation of 5500 kcal at the port increased by about 200 yuan / ton. Last week, the price of 5500 kcal coal in QinGang was 1308 yuan / ton (mom + 17.52%), and other calorific value coals also generally rose. The spot price of jingtanggang coking coal (produced in Shanxi) was 3325 yuan / ton (mom + 3.10%), and the spot price of secondary metallurgical coke (produced in Tangshan) was 3050 yuan / ton (mom + 7.02%). The profit of transporting coal from Inner Mongolia and Shanxi to the port is + 20 / + 110 yuan / ton. Last week, the average transfer volume of QinGang railway was 500000 tons (mom + 6.68%), the average daily throughput was 500000 tons, the average number of ships in QinGang anchorage was 66 (mom + 32.85%), and the inventory of QinGang was 4.95 million tons (mom + 0.81%). The total coal inventory of the three northern ports was 9.1 million tons (mom + 4.06%). The daily consumption and inventory of power plants in eight coastal provinces were – 5.59% and – 1.24% respectively. The operating rate of iron and steel blast furnaces in China was flat month on month. Last week, the average daily sales volume of Inner Mongolia Eerduosi Resources Co.Ltd(600295) highway was 1.7617 million tons (mom + 11.18%).
Short term industry fundamentals tracking: strong demand superimposed on high import prices, driving China’s coal prices to continue to strengthen. After the festival, coal mine production has basically resumed. It is expected that after the “two sessions”, the supply or all will return to normal, and the power coal producing area shows a situation of booming supply and demand. In the short term, the replenishment of power plants exceeds expectations, and the downstream procurement of cement and other building materials has also warmed up. Superimposed on the continuous active replenishment of chemical enterprises, the producing area shows a situation of tight supply. Although the railway transportation volume has increased, the situation of insufficient supply of goods at the port has not changed. There are few available resources. The overseas coal price has pushed up the downstream coal price expectation, and the port procurement is also gradually heating up. It is expected that the short-term spot price will continue to rise under the background of the sharp rise of international energy prices. In terms of coke, the output of downstream steel mills has increased one after another, and the efforts to replenish the warehouse have not decreased. In addition, enterprises have increased short-term losses and reluctant to sell, so their willingness to raise prices is obvious. In terms of coking coal, as the coke boom stabilizes and the purchase of raw coal increases, the supply of high-quality main coking coal is tightening, the price is improving as a whole, and the scope of price increase is further expanded.
Risk factors: economic growth slows down; Centralized supply release suppresses coal prices, etc.
Investment strategy: it is expected to improve again, and the rising space of the sector is expected to expand. Since this year, coal prices have performed better than expected. In the short term, overseas energy prices have remained high, demand has exceeded expectations again driven by seasonal factors, and market optimism has heated up. Stable growth, real estate policy relaxation and other policy expectations will also support the medium-term expectations of the sector. According to the current performance expectations and valuation level, the rising space of the sector may be further expanded. We continue to recommend along three main lines: 1) Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) , Yankuang energy, which has a high proportion of spot and flexible performance of coal chemical industry sector; 2) Shaanxi Coal Industry Company Limited(601225) , Shan Xi Hua Yang Group New Energy Co.Ltd(600348) , which has a large sales volume of chemical coal; 3) Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Huaibei Mining Holdings Co.Ltd(600985) , Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , which has valuation advantages among metallurgical coal companies.
