Investment strategy: the overall coal price is still rising sharply this week, and the inversion of imported coal price is serious. The supply uncertainty caused by the situation in Ukraine has further exacerbated the energy dilemma in Europe. US President Biden has officially signed an executive order prohibiting the United States from importing energy from Russia. Some European countries are still waiting to consider the issue of energy security; Indonesia may issue another export ban in April or August due to China’s tight supply, and the global shortage of coal supply is still obvious. Overall, the stock capacity is a scarce resource. Coal stocks are generally valued at 5-6 times, and the stability of price and profit expectations is improved. It is suggested to actively layout coal stocks in 2022. In terms of individual stock recommendation, companies with a high proportion of long-term association have more stable performance growth, companies with a high proportion of coal in the market have more attractive valuation, and companies with large advantages of coal types or logic of output growth have strong competitiveness α In addition, coal stocks that actively layout energy transformation will also get the opportunity to improve their valuation. It is suggested to pay attention to: Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Shaanxi Coal Industry Company Limited(601225) , Yanzhou Coal Mining Company Limited(600188) , China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , Shanxi Coal International Energy Group Co.Ltd(600546) , Beijing Haohua Energy Resource Co.Ltd(601101) , power investment and energy. Metallurgical coal stocks are suggested to pay attention to: Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Jizhong Energy Resources Co.Ltd(000937) , Shanxi Coking Co.Ltd(600740) . Attention to anthracite: . Coke stocks are suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015) .
Summary and Prospect of power coal: the supply is limited, the demand is strong, and the coal price continues to rise strongly. This week, the market continued its strong performance, the purchase prices of large groups increased, and the coal price continued to rise strongly. In terms of supply, the production and sales of coal mines in the origin are good, but they are still dominated by supply guarantee and long-term cooperation. The tight coal supply in the market and the release of downstream demand lead to the phenomenon of coal grabbing in the export market, and the prices rise frequently, which is expected to be supported in the future. In terms of import, Indonesia’s coal supply is gradually diverted to Japan, South Korea, Europe and the United States, and China’s import volume has decreased. From January to February, China imported 35.39 million tons of coal, a year-on-year decrease of 14% (or – 5.74 million tons). Considering the recent tense international energy situation, it is expected that the imported coal price will remain high, and the import will be significantly affected. In terms of demand, the resumption of work is still continuing, and there is a strong demand for replenishment of chemical industry and cement. Considering the off-season demand of subsequent power plants, the procurement rhythm of power plants is controlled. In the follow-up, we still need to pay attention to the downstream demand and the impact of Russia Ukraine issues on the international coal market.
Summary and Prospect of coking coal: downstream procurement is active, and the price rise in China and abroad continues. As of March 11, the price of Shanxi produced main coking coal depot in Jingtang Port has increased by 3350 yuan / ton (including tax), and the price of hard coking coal in Fengjing mine has increased by 30% week on week, and the rise continues. In terms of supply, affected by the environmental protection inspection in Inner Mongolia and the safety production restriction during the two sessions, the overall output of the market fell and the supply was tight; International supply is also generally tight, and coking coal prices continue to rise sharply. In terms of importing Mongolian coal, Ganqi Maodu port passed Customs on the 3rd of this week, with an average daily customs clearance of 174 vehicles (week on week + 31 vehicles), the low customs clearance picked up, and the quotation continued to rise. In terms of demand, the arrival of coke enterprises is poor, the purchasing power is still high, traders take goods actively, and the demand is strong. After that, we will continue to pay attention to the production and downstream demand of coke enterprises.
Coke summary and Outlook: the market still has bullish expectations after the lifting and landing of rotation. As of March 11, the price of secondary metallurgical coke in Tangshan was 3400 yuan / ton. The third round of price increase landed, and some coke enterprises in Northwest and Shanxi raised 200 yuan / ton in the fourth round again. In terms of supply, affected by the environmental protection control during the two sessions, the start-up of enterprises in some regions continued to decline slightly, coke enterprises continued to maintain a low inventory level, and production was weak. In terms of demand, due to the strict production restriction during the two sessions, the commencement of downstream steel mills and hot metal production decreased slightly. However, considering the poor arrival situation in the near future, the steel mills are still willing to replenish the stock. Overall, the short-term supply side is still limited, supporting the room for coke price rise. Follow up attention will continue to be paid to the resumption of production of downstream steel mills after the two sessions.
Power coal: the price of port coal rises, and the port inventory increases. (1) As of March 11, the price of 5500 kcal of thermal coal produced in Shanxi was 1664 yuan / ton, up 356 yuan / ton on a weekly basis. (2) As of March 1, the price of power coal in Newcastle was US $265.94/ton, up 7.1% week on week. (3) From March 7 to 11, the average transfer in volume of Qinhuangdao port railway was 539000 tons, with an increase of 23000 tons compared with the week on month. The average throughput of Qinhuangdao coal port was 527000 tons, an increase of 20000 tons on a weekly basis. (4) As of March 11, the inventory of Qinhuangdao port was 5.02 million tons, an increase of 70000 tons on a weekly basis. The weekly coal inventory decreased by 2.39 million tons compared with that of the Yangtze River
Coking coal: the price of coking coal in China rose, and the inventory of coking plants decreased month on month. (1) As of March 11, the price increase (including tax) of the main coking coal depot in Shanxi of Jingtang Port was 3350 yuan / ton, with a weekly increase of 420 yuan. (2) As of March 10, the price of hard coking coal in Fengjing mine was US $689.55/ton, up 30.35% on a weekly basis; The price of low volatile injection coal was US $300 / ton, with a weekly increase of 7.14%. (3) As of March 11, the total inventory of coking coal of China’s independent coking plants (100) was 11.418 million tons, with a decrease of 300000 tons on a weekly basis, 15.80 days of available coking coal and a decrease of 0.20 days on a weekly basis.
Coke: the price rose month on month, and the operating rate of coking plant increased. (1) As of March 11, the price of secondary metallurgical coke in Tangshan was 3400 yuan / ton, up 200 yuan on a weekly basis. (2) The coke oven productivity of China’s independent coking plants (100) was 74.60%, and the cycle to cycle ratio decreased by 0.20%; (3) As of March 11, the operating rate of major rebar mills in China was 55.08%, with a week on month increase of 1.64%. (4) As of March 11, the coke inventory of China’s sample steel plants (110) was 7.2074 million tons, with a decrease of 124300 tons on a weekly basis; As of March 11, the total coke inventory of three types of coking enterprises (production capacity 1 million tons; production capacity 1-2 million tons; production capacity 2 million tons) was 618000 tons, with a decrease of 6000 tons on a weekly basis.
Review of industry highlights: (1) Biden officially signed the U.S. energy import ban on Russia (2) in February, Australia’s Hedland port exported 333673 million tons of iron ore to China, with a year-on-year increase of 8.58% (3) yingpanhao, the main mine of Yankuang energy, has entered the trial production stage (4) Indonesia may issue another coal export restriction order (5) Shandong’s coal output will stabilize at about 95 million tons in 2022
Risk warning: the economic growth rate is lower than expected; Excessive policy regulation; Renewable energy substitution, etc; Risk of coal import impact.
