The bottom of power coal is expected to appear. As of December 31, wind data showed that the market price of q5500 thermal coal in Qinhuangdao port closed at 788 yuan / ton, with a decrease of 114 yuan / ton on a weekly basis. The inventory of key ports (SDIC Jingtang Port, Qinhuangdao port and Caofeidian port) was 10.94 million tons, with a decrease of 358000 tons on a weekly basis. According to the coal resources network, this week, the price of purchased coal of large groups was lowered again, the price of mines in the main producing area was adjusted, and the panic selling of traders increased. It is expected that the supply guarantee task will end after new year’s day, and the mine production will return to normal. However, the inventory of power plants is at a high level, and the daily consumption is lower than expected. The purchase slows down, and it is expected that there will be continuous destocking in the future. According to the notice on coal production and supply in January 2022 issued by the national development and Reform Commission, the long-term cooperative price in January 2022 is still temporarily implemented according to the price in December 2021, that is, the price of q5500 thermal coal is 725 yuan / ton. We believe that the bottom of the market coal price is expected to be near the long-term cooperative price, and the downward space of the price is limited.
Coke price is expected to be strong. According to wind data, as of December 31, the on-site price of Tangshan secondary metallurgical coke closed at 2660 yuan / ton, up 100 yuan / ton on a weekly basis; The market price of Linfen secondary metallurgical coke closed at 2380 yuan / ton, unchanged on a week-on-week basis. In the port, the price of Tianjin Port Co.Ltd(600717) primary metallurgical coke was 2810 yuan / ton, unchanged on a week-on-week basis. According to the coal resources network, with the rise of raw coal price, the production cost of coke enterprises increases, and some coke enterprises even suffer losses. The superposition of environmental protection inspection is frequent, the operating rate of coke enterprises is affected, and the coke supply may be reduced. In terms of demand, the downstream steel mills have a good demand for coke, some steel mills prepare the warehouse in advance, and the expectation of resumption of production of steel mills in the near future is enhanced, resulting in an increase in coke procurement. On the whole, the downstream demand has improved, the purchasing enthusiasm has increased, the coke enterprises are optimistic about the coke price, and the rebound of coal price has certain support for the rise of coke price. It is expected that the coke market may operate stably and strongly in the short term.
Coking coal supply has shrunk, and the price is expected to be stable and stronger. According to the coal resources network, this week, CCI Shanxi’s low sulfur weekly ratio increased by 38 yuan / ton, Shanxi’s high sulfur weekly ratio increased by 11 yuan / ton, Lingshi fat coal weekly ratio increased by 300 yuan / ton, and Changzhi injection coal increased by 30 yuan / ton. According to the coal resources network, in terms of supply, the safety and environmental protection inspection of coal mines will be more and more strict at the end of the year, affecting the coal mine output to decline to varying degrees. Downstream, some steel mills accepted the first round of increase in coke price, the coke market sentiment improved slightly, and the raw coal storage in the plant of coke steel enterprises was low, and there was a demand for replenishment of raw coal. Overall, the coking coal market is expected to rise steadily in the short term..
Investment suggestions: 1) companies with stable profits and high cash flow are also expected to usher in value revaluation. It is recommended to pay attention to China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Shaanxi Coal Industry Company Limited(601225) , Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) . 2) The transformation of traditional energy enterprises to new energy kicked off, and Yankuang energy and power investment energy were recommended. 3) Under the dual carbon target, we recommend Shanxi Blue Flame Holding Company Limited(000968) as the target for methane emission reduction.
Risk tip: risk of economic slowdown; Risk of sharp decline in coal prices; Risk of policy change.
