Raw coal output from January to February: from January to February, the cumulative output of raw coal in China was 687 million tons, a year-on-year increase of 10.3%. From January to February, the daily average raw coal output was 11.637 million tons, a month on month decrease of 771000 tons / day compared with December 2021. Affected by the Spring Festival holiday, the daily average output decreased month on month, but the total output still increased compared with the same period last year.
Coal import volume from January to February: 35.391 million tons of coal and lignite were imported from January to February, a year-on-year decrease of 14%.
Based on the data of China’s output and import volume in the previous two months, the growth rate of China’s coal supply in 2022 was 9.1% (the growth rate from January to December 2021 was + 4.8%).
Fixed asset investment: from January to February, the growth rate of fixed asset investment in infrastructure, manufacturing and real estate was 8.61%, 20.9% and 3.7% respectively. The investment in manufacturing performed well.
From January to February, infrastructure investment increased by 8.61% year-on-year, while the cumulative growth rate of infrastructure investment from January to February 2021 was 34.95%.
From January to February, the fixed investment in manufacturing industry increased by 20.9% year-on-year, and the cumulative fixed investment in manufacturing industry increased by 37.3% year-on-year from January to February 2021.
From January to February, the investment in real estate development increased by 3.7% year-on-year, and the cumulative investment in real estate development increased by 38.3% year-on-year from January to February 2021. (the high growth rate in 2021 is due to the low base under the influence of the epidemic in 2020)
From January to February, the thermal power industry: the cumulative output of thermal power increased by 4.3% year-on-year, and the cumulative output of hydropower increased by 8.2% year-on-year. From January to February, China’s industrial added value increased by 7.5% year-on-year. From January to February, the cumulative power generation of the whole society was 1314.1 billion kwh, with a cumulative year-on-year increase of 4.0%, and the growth rate decreased by 4.1 percentage points compared with the whole year of 2021. From the main power generation entities, the thermal power output from January to February totaled 986.4 billion kwh, an increase of 4.3% year-on-year. From January to February, hydropower totaled 144 billion kwh, an increase of 8.2% year-on-year.
Coke and cement industry from January to February: coke output from January to February decreased by 7.6% year-on-year, and cement output decreased by 17.8% year-on-year. In terms of the iron and steel industry chain, the cumulative output of coke from January to February was 74.36 million tons, a cumulative year-on-year decrease of 7.6%. From January to February, the cumulative output of pig iron was 132.13 million tons, a year-on-year decrease of 10.8%. From January to February, the cumulative value of crude steel was 157.96 million tons, with a cumulative year-on-year decrease of 10%. Factors such as the limited production of the Winter Olympic Games and the two sessions had a great impact on coke production. In terms of building materials industry chain, the cumulative output of cement from January to February was 199.33 million tons, with a cumulative year-on-year decrease of 17.8%.
Based on the output data of thermal power, coke and cement in China in the previous two months, it is roughly estimated that the growth rate of China’s coal demand from January to February is – 1.3% (from January to December 2021 is + 4.6%). (assuming that the unit coal consumption remains unchanged, chemical and other coal consumption remains unchanged, and the demand for thermal power, steel and building materials accounts for 53%, 17% and 13% respectively)
Inventory: the inventory of thermal coal and coking coal decreased from January to February. (this does not match the growth rate of supply and demand analyzed above, and it is inferred that the caliber of coal output may change)
From January to February, the downstream resumed work faster than the production resumed work, and the storage of power coal decreased. By the end of February 2022, the coal inventory of key northern ports (Qinhuangdao + Huanghua Port + Caofeidian + SDIC Jingtang Port) totaled 10.43 million tons, a decrease of 2.33 million tons compared with the end of December 2021, of which the coal inventory of Caofeidian port decreased from 4.31 million tons to 2.89 million tons, The inventory of Jingtang Port decreased from 1.74 million tons to 1.12 million tons. In March, the daily consumption continued to rise and the inventory continued to decline. As of March 10, the inventory of key ports in the North was 10.22 million tons, a decrease of 210000 tons compared with the end of February and 6.25 million tons compared with the same period last year.
From January to February, the inventory of coke market increased. As of the end of February, the inventory of coking enterprises (100) in the plant was 943000 tons, an increase of 506900 tons compared with the end of December 2021. In March, the downstream demand continued to improve, the steel plant replenished actively, and the inventory further decreased to 618000 tons (March 11), a decrease of 325000 tons compared with the end of February and 143000 tons compared with the same period last year; The inventory of coke coal at the end of coke raw material decreased month on month. As of the end of February, the inventory of coking coal in coking plants (100) was 11.496 million tons, down 381300 tons compared with the beginning of the year. As of March 11, the inventory was further reduced by 78000 tons to 11.418 million tons. Since the fourth round of coke rise in March, the coking profit has improved, the operating load has rebounded, the impact of the Winter Olympics production restriction has been gradually eliminated, the downstream demand margin has improved, the steel plant starts to pick up, the demand has just increased, and both ends of supply and demand have improved.
Price situation: in February, the price of thermal coal increased month on month, and the price of coke and coking coal decreased slightly month on month.
In February, the average closing price of q5500 power end coal produced in Shanxi, Qinhuangdao was 1057 yuan / ton, up 416 yuan / ton year-on-year, 129 yuan / ton month on month, up 39 yuan / ton compared with December 2021. In March, driven by the resumption of production and work, supply and demand were tense in stages, pushing up prices. As of March 15, the closing price of q5500 power end coal produced in Shanxi, Qinhuangdao was 1545 yuan / ton, up 393 yuan / ton from the end of February, reaching 1664 yuan / ton at one time.
In February, the average output of main coking coal in Shanxi of Jingtang Port was 2716 yuan / ton, an increase of 61% year-on-year. In February, the price of coking coal operated strongly, with an overall increase of 335 yuan / ton compared with the average price in December 2021 and a slight decrease of 53 yuan / ton compared with January. The price of main coking coal rose to 3350 yuan on March 15.
In February, the average price of secondary metallurgical coke in Tangshan was 2862 yuan / ton, a year-on-year increase of 3.10%, an increase of 298 yuan / ton compared with the average price in December and a decrease of 191 yuan / ton compared with January. In March, coke rose again for two rounds. As of March 15, the price of secondary metallurgical coke in Tangshan was 3400 yuan / ton, an increase of 400 yuan / ton compared with the end of February.
Investment strategy: the coal mining sector (CITIC) increased by 11.32% from January to February 2022 and 2.82% during the year (as of March 15). At present, China’s coal output is more than 12 million tons / day. There is little room for further improvement. Superimposed on the impact of the Russian Ukrainian war, the coal source in the Asia Pacific region is tight. Due to the tight supply of China, Indonesia may issue another export ban in April or August, The price inversion of imported coal is serious, which further promotes the rise of coal price under the condition of phased and structural coal shortage in China. At present, the market is worried about the disturbance of demand. We believe that the policy has a strong willingness to stabilize growth, and the epidemic has only affected the rhythm of demand. Overall, the stock capacity in the next few years 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. Companies with more stable growth and higher valuation of coal stocks are more attractive than companies with higher growth performance 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 power coal stocks: Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) (coal stocks with extremely low value have large room for output growth) Shaanxi Coal Industry Company Limited(601225) (growth leader with excellent resource endowment, stable performance and high dividend); Yankuang energy (coal, coal chemical two wheel drive, elastic high score red standard) China Shenhua Energy Company Limited(601088) (giant of coal enterprises, stable performance and high dividend) China Coal Energy Company Limited(601898) (coal production capacity is still expected to expand, and the coal chemical business provides performance flexibility) Shanxi Coal International Energy Group Co.Ltd(600546) (low cost of coal mine and great flexibility of market-oriented pricing) Beijing Haohua Energy Resource Co.Ltd(601101) (market-oriented pricing, very flexible performance); Power investment energy (high-quality coal and aluminum assets, large-scale layout and new energy operation).
It is suggested to pay attention to metallurgical coal: Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) (high proportion of coal in the market and high performance flexibility) Pingdingshan Tianan Coal Mining Co.Ltd(601666) (coking coal leader in central and southern China with high dividend, with large space for staff reduction and efficiency increase) Shanxi Coking Coal Energy Group Co.Ltd(000983) (the leader of coking coal industry and the target of Shanxi state-owned enterprise reform) Huaibei Mining Holdings Co.Ltd(600985) (regional leader in low value coking coal, and many performance growth points such as coking coal, gravel aggregate and coal coking go hand in hand) Jizhong Energy Resources Co.Ltd(000937) (market-oriented sales mechanism, leading regional coking coal with undervalued value) Shanxi Coking Co.Ltd(600740) (holding 49% equity of China Coal Huajin, with great flexibility in coking coal asset performance). It is suggested to pay attention to anthracite: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) (coal chemical industry integration, future capacity increment can be expected, and coal price elasticity is large); Coke stocks are suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) (coke production capacity still increases, and the layout of hydrogen energy industry chain continues to expand) Jinneng Science&Technology Co.Ltd(603113) (for coke companies with strong profitability, Qingdao PDH new project will become the growth engine of the company); China Xuyang group (coke industry leader, market share continues to increase) Kailuan Energy Chemical Co.Ltd(600997) (coal coke integrated tap with underestimated value) Shaanxi Heimao Coking Co.Ltd(601015) (strong growth logic and simultaneous rise of volume and price).
Risk warning: excessive policy regulation; The economic growth rate is lower than expected; Renewable energy substitution; Risk of coal import impact.
