Core view
The national development and Reform Commission determined the benchmark price of power coal long-term association this year, and the price center rose to stabilize the profitability of the industry. On February 28, the national development and Reform Commission issued that the benchmark contract price of underground coal is 675 yuan / ton of 5500 kcal of thermal coal, and the benchmark contract price of non underground coal is determined by the pit mouth price after deducting the transportation and miscellaneous expenses from the benchmark price of underground coal. This benchmark price is 26.17% higher than the 535 yuan / ton that has been used since 2017, and 25 yuan / ton lower than the benchmark price of 700 yuan in the medium and long term coal contract signing and performance plan (Exposure Draft) issued in December 2021. The implementation of the benchmark price of the long term agreement this year determines that the price center of thermal coal will move upward, which will be conducive to the stability and safety of the long-term coal supply market, Ensure that the energy rice bowl is in their own hands. At the same time, the price increase of the long-term association is good, and the profit of coal enterprises with a high proportion of the long-term association is improved. They are optimistic about the positive profit growth of the industry throughout the year.
The international turmoil has affected the rise of energy prices, and the prices of the three major international ports are close to the highest point of last year. This week, the revenue of the coal Shenwan industry rose sharply, mainly due to the expected rise in the price of power coal. Before and after the Spring Festival, due to the production holidays and large-scale events, the coal mine was shut down and overhauled, the overall supply was insufficient, and the port inventory continued to decline. At the same time, the daily consumption of downstream power plants continued to increase and replenish the inventory. Since the beginning of 2022, the coal supply and demand pattern has remained tight, Recently, the coal price is still fluctuating at a high level. At the same time, affected by the situation in Russia and Ukraine, the international energy price continues to rise, the price of crude oil and natural gas continues to reach a new high in recent years, and the price of thermal coal in the three major international ports has been rising since the beginning of December last year. As of March 4, the three major international coal ports, Newcastle port The spot prices of thermal coal in Richard port and the three European ports of Ara are 265.94 US dollars / ton, 247.5 US dollars / ton and 195 US dollars / ton respectively, close to the highest level during the “coal shortage” period in October 2021. The rise of international coal prices will further push up China’s coal prices.
Coal prices continued to be strong in the first quarter, and the determination of performance drove the continuous repair of valuation. In the first quarter, with the continuous recovery of coal production and the easing of overseas situation, coal prices have continued to rise since January. The performance of the first quarter is highly deterministic, and the profit level of coal enterprises has remained at a high level in the same period. In the second quarter, we expect that the coal price will fall with the stability of the overseas situation and the recovery of China’s supply, and the deepening of the market-oriented reform of downstream electricity price will open up the space for the rise of coal price. It is expected that the price of thermal coal will remain at a high level for nearly three years throughout the year. We believe that the constraints on coal capacity supply in the future will continue to exist, The continuous rise of overseas coal prices and the response of coal in the market other than Changxie coal to the coal gap will continue to stimulate the fluctuation of China’s coal price, steady growth and the instability of the external situation. The position of coal as a “ballast” of energy is unshakable, the continuous correction of policies, and the rational understanding of coal consumption will gradually deepen. With the continuous improvement of the performance of coal enterprises, We believe that the valuation repair market will continue to be reflected in the future market.
Investment suggestion: recommend power coal leader Shaanxi Coal Industry Company Limited(601225) .
Risk tip: downside risk of economic growth, mismatch risk of supply and demand, impact of extreme weather and coal policy are not as expected.
