Power coal & double coke continued to be strong, and the performance of coal enterprises ushered in a good start
The price of thermal coal continued to be strong this week, and the spot price elasticity was loose. The fundamentals of supply and demand are still tight this week: in terms of demand, with the warming weather, the high level of civil power load gradually fell, driving the daily consumption of terminal power plants to decline, but the performance of industrial power consumption is still resilient, and the decline range of daily consumption is limited. At the same time, with the efforts of cement chemical enterprises to replenish the warehouse, the demand for non electric coal continues to release. In addition, the price of imported coal is seriously inverted, catalyzing the shift of import demand to domestic trade, and the demand for spot procurement is relatively strong; In terms of supply, during the period of the two sessions and the winter Paralympic Games, the security inspection of production areas has become stricter, and China’s coal supply has been tightened periodically; In terms of ports, the inventory of QinGang port is still maintained at the low level of 5 million tons. The tight supply of the port market is prominent, which supports the coal price. In the later stage, the demand for coal and electricity is about to enter the off-season. However, considering that the steady growth policy drives the demand for infrastructure construction, the industrial power load is resilient, and the demand for non electric coal replenishment is released, we believe that the coal price may still be running at a high level in the off-season. We believe that the current price policy may have relaxed the elasticity of spot coal price on the basis of ensuring the high coverage of Changxie coal, and the fundamentals can still provide strong support for spot coal price in case of non extreme rise. In terms of dual coke, driven by the recovery of downstream steel demand, the price rise trend of coke and coking coal continued this week. In the later stage, with the end of the two sessions and the production limit period in autumn and winter, the downstream demand will still be further released. At the same time, the overall supply side is tight, and the price of dual coke may still have upward space. The short-term investment logic of the coal sector mainly focuses on the main line of “stable growth”: the government work report of the two sessions again proposes to carry out infrastructure investment in advance to benefit the coal coke steel industry chain; The long-term investment logic has three main lines: high long-term cooperation and high dividend (stable performance and reduced capital expenditure, supporting high dividend yield), asset injection (new mineral resources are increasingly scarce, and asset injection will become the main way of capacity growth), energy transformation (using the high cash flow of the main industry to layout the transformation of new energy and new materials in the context of double carbon, so as to open up the future growth space). This week, some coal enterprises released the operating data from January to February. At the beginning of the year, it made a good start and established the high growth trend of Q1 performance. The high performance of the whole year is worth looking forward to. We believe that the current coal sector has high allocation value and is optimistic about the market of the sector. Objects benefiting from steady performance and high dividend: Yankuang energy, China Shenhua Energy Company Limited(601088) , Shaanxi Coal Industry Company Limited(601225) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) ; Objects expected to benefit from growth: Shanxi Coking Coal Energy Group Co.Ltd(000983) , Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Guizhou Panjiang Refined Coal Co.Ltd(600395) , Huaibei Mining Holdings Co.Ltd(600985) Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) transformation target beneficiaries: Power Investment energy, Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) , Shan Xi Hua Yang Group New Energy Co.Ltd(600348) , Shanxi Coal International Energy Group Co.Ltd(600546) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group (H shares); Object of benefit from debt restructuring: Wintime Energy Co.Ltd(600157) .
Coal power industry chain: the power coal price continued to be strong this week, and the spot price elasticity was loose
This week (March 7-march 11, 2022), the price of thermal coal continued to be strong. According to wind data, the closing price of q5500 thermal coal in QinGang soared to more than 1600 yuan, and the spot price elasticity was loose. The fundamentals of supply and demand are still tight this week: in terms of demand, with the warming weather, the high level of civil power load gradually fell, driving the daily consumption of terminal power plants to decline, but the performance of industrial power consumption is still resilient, and the decline range of daily consumption is limited. At the same time, with the efforts of cement chemical enterprises to replenish the warehouse, the demand for non electric coal continues to release. In addition, the price of imported coal is seriously inverted, catalyzing the shift of import demand to domestic trade, and the demand for spot procurement is relatively strong; In terms of supply, during the period of the two sessions and the winter Paralympic Games, the security inspection of production areas has become stricter, and China’s coal supply has been tightened periodically; In terms of ports, the inventory of QinGang port is still maintained at the low level of 5 million tons. The tight supply of the port market is prominent, which supports the coal price.
Coal coke steel industry chain: Double coke has been rising continuously this week, paying attention to the release of demand after the two sessions and production restriction in autumn and winter
Coke: the coke price rose by 200 yuan again this week. In terms of demand, due to the impact of production restriction during the two sessions this week, the operating rate of steel mills fell periodically, but considering the large inventory consumption in the previous stage, the demand for replenishment is still releasing; In terms of supply, the operating rate of coke enterprises was also affected by the tightening of security inspection and environmental protection during the two sessions. This week, production restrictions increased and supply tightened. In addition to the fundamentals of supply and demand, the rise of coke price is also supported by the rise of raw coal price on the cost side, and the profits of coke enterprises are compressed. Coking coal: coking coal prices continued to rise this week, forming favorable conditions at both ends of supply and demand. At the downstream of the demand side, the efforts of coke steel enterprises to replenish storage have increased, and the overall demand for coke coal is strong; On the supply side, before and after the two sessions, the origin was more affected by security inspection and environmental protection, the operating rate of coking coal mines declined, and the supply of origin tightened. Overall, the supply of coking coal has been tightened again. At the same time, after the two sessions, it coincides with the end of production restriction in autumn and winter in the downstream. With the acceleration of coke steel production resumption, the downstream may usher in further demand release. Coking coal prices may continue to be on the high side.
Risk tip: downside risk of economic growth, mismatch risk of supply and demand, accelerated substitution risk of renewable energy
