Summary of this issue:
The price of overseas energy products reached a new high, and the price of China Shipbuilding Industry Group Power Co.Ltd(600482) coal rebounded. As of March 4, the pithead price of Shaanxi Yulin power lump coal (q6000) was 970.0 yuan / ton, up 50.0 yuan / ton on a weekly basis and 480 yuan / ton on a year-on-year basis; The pit mouth price of sticky coal (including tax) (q5500) in the southern suburb of Datong was 865.0 yuan / ton, up 13.0 yuan / ton on a weekly basis and 427 yuan / ton on a year-on-year basis; Inner Mongolia Dongsheng large clean coal truck sector price (q5500) was 837.0 yuan / ton, up 29.0 yuan / ton on a weekly basis and 431 yuan / ton on a year-on-year basis.
The price policy was implemented and the port was actively transported. This week, 7288 trains arrived from Qinhuangdao Port Railway, an increase of 22.94% over the previous week; Qinhuangdao Port handled 560000 tons, an increase of 20.43% over the previous week. As of March 3, the inventory of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 9.1 million tons (decreased by 1255000 tons on a weekly basis), the number of anchorage ships was 107.0 (decreased by 17.00 on a weekly basis), and the cargo ship ratio (inventory to ship ratio) was 6.3 (decreased by 2.27 on a weekly basis).
Coal inventories in all provinces continued to decline, temperatures picked up and daily consumption slowed down. As of March 3, the coal inventory of the eight coastal provinces was 27.992 million tons, down 351000 tons (- 1.24%) on a weekly basis, the daily consumption was 1.772 million tons, down 105000 tons / day (- 5.59%) on a weekly basis, and the available days were 15.8 days, up 0.70 days on a weekly basis. As of March 4, the market price of Qinhuangdao port thermal coal (q5500) produced in Shanxi was 940.0 yuan / ton, unchanged on a weekly basis. International coal price: as of March 1, the spot price of power coal in Newcastle port was 265.9 US dollars / ton, up 25.50 US dollars / ton on a weekly basis. As of March 4, the active contract of thermal coal futures rose 107.2 yuan / ton to 852.2 yuan / ton compared with the same period last week, and the futures discount was 87.8 yuan / ton. In the face of the conflict between Russia and Ukraine, Japan and European countries have reduced their coal imports to Russia out of consideration of supply security and political standing, and the demand has shifted to coal producing areas such as Australia and Indonesia. Affected by this, the price of power coal in Newcastle hit another record high. We should attach great importance to the reconstruction of the global energy pattern behind the Russian Ukrainian conflict.
Coke: the price of raw materials rose faster than the selling price, and the overall commencement of coke enterprises fell. As of March 4, 2022, Fenwei CCI Luliang quasi primary metallurgical coke reported 2960 yuan / ton, with a weekly increase of 200 yuan / ton, a monthly increase of 7.25% and a year-on-year increase of 23.3%. Port index: CCI Rizhao quasi primary metallurgical coke reported 3380 yuan / ton, with a weekly increase of 260 yuan / ton, a monthly increase of 11.55% and a year-on-year increase of 30.0%. Downstream steel mills continued to resume production and overseas orders recovered, resulting in strong coke demand; However, due to the faster rise in the price of upstream raw materials, the overall operating level of national coke enterprises has fallen, the supply is weak, and the inventory of coke plants has fallen. It is expected that there is still room for coke to rise in the future.
Coking coal: the tight supply pattern intensifies, and coking and coal blending follow up. As of March 3, 2020, CCI Shanxi low sulfur index was 2818 yuan / ton, up 288 yuan / ton on a weekly basis and 63 yuan / ton on a monthly basis; CCI Shanxi high sulfur index was 2485 yuan / ton, up 222 yuan / ton on a weekly basis and 162 yuan / ton on a monthly basis; Lingshi fat coal index was 2450 yuan / ton, up 150 yuan / ton on a weekly basis and 100 yuan / ton on a monthly basis; Puxian 1 / 3 coke index was 1900 yuan / ton, down 200 yuan / ton on a weekly basis and 100 yuan / ton on a monthly basis. Affected by the shortage of coal sources, the shortage of main coking coal supply continued to intensify, and the coking coal blending price with weak early shipment also increased to a certain extent.
We believe that at present, we are in the early stage of a new round of upward cycle of coal economy, and the fundamentals, policies and companies resonate. At this stage, the allocation of coal sector is at the right time. On March 1, vice premier Han Zheng presided over the plenary meeting of the leading group for carbon peak and carbon neutralization, emphasizing “rational planning of the scale and layout of coal power construction” and “giving full play to the basic and bottom-up guarantee role of coal in energy”. On March 5, Premier Li Keqiang delivered a government work report at the fifth session of the 13th National People’s Congress. The report continued to put forward “strengthening the clean and efficient utilization of coal” and “excluding the new renewable energy and raw material energy from the total energy consumption control”, which once again formed a favorable policy for the long, medium and short-term demand for coal. With the adjustment of industrial structure and the rapid growth of residents’ domestic energy consumption, the demand for energy in current social development is becoming more and more rigid, rather than the limited output of fossil energy, and the demand for coal is expected to gradually increase with economic growth; At present, the new capital expenditure on the coal supply side is weak, while the depletion of resources in old mining areas is accelerating, and the coal supply may be difficult to respond to the demand growth during the 14th Five Year Plan period. This round of energy inflation is based on the production capacity cycle and boosted by over issuance of money. Its scale and sustainability will far exceed expectations. The profit of coal enterprises is determined and the future can be expected. At this stage, the industry fundamentals, the underlying logic of the policy and the direct effect are favorable for the repair and improvement of the valuation of the sector. Considering the certainty of the high growth of performance in the first half of this year, it 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, Yankuang energy, the leader of low value and high dividend power coal, 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) , which are both resource scarcity and significant growth; Third, Shanxi Coking Coal Energy Group Co.Ltd(000983) and Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , which have great potential for extensive expansion brought by the increase of asset securitization rate of state-owned coal group.
Risk factors: coal mine safety production accidents in key companies; The macro economy has fallen sharply.
