The policy promotes the implementation proportion of the long-term association, and the price of thermal coal is still in a high position. In the first quarter, there were many constraints on the supply side of coal in China. At the same time, due to the influence of overseas coal prices, the number of imported coal fell significantly, which promoted the tension between China’s coal supply and demand. According to the data of the national development and Reform Commission, the daily coal production in March gradually returned to more than 12 million tons, close to the highest level of last year. On March 14, the national development and Reform Commission held a meeting to promote the “four increases and one control” to ensure coal supply. Comprehensive measures will be taken to release 300 million tons of coal production capacity. It is expected that the supply will increase steadily in the short term. Under the national coal supply and demand Association, the implementation of measures to ensure the safety of coal supply and demand in the coal market is relatively high, and the coal supply and demand of coal enterprises is relatively high. Under the short supply of coal, the national coal supply and demand Association will give priority to the coal market.
The growth rate of coal consumption is stable year-on-year. On the demand side, the data released by the National Energy Administration on March 15 showed that in February, the power consumption of the whole society continued to grow, reaching 623.5 billion kwh, a year-on-year increase of 16.9%. From January to February, the total electricity consumption of the whole society was 1346.7 billion kwh, with a year-on-year increase of 5.8%. The high growth rate at the power consumption end increased the positive reserve of coal stocks by downstream power plants. On the other hand, after the important meeting, the expectation of steady growth was strong, and the downstream industrial enterprises would resume production in an all-round way. It is expected that the coal demand driven by industrial electricity will maintain a relatively high growth. According to our previous prediction, the annual power coal consumption will still maintain a positive growth rate, The overall price of coal will form a strong support, and the overseas situation will push up the international energy price. The recent rainstorm in Australia has affected the international coal supply, and the short-term high energy price cannot be reversed, resulting in the high price of imported coal. We are optimistic that China Shipbuilding Industry Group Power Co.Ltd(600482) coal will continue to operate at a high price in the future. The recent market correction is large. We believe that the industry has strong certainty of profit, low valuation and thick safety cushion, It is suggested to increase the allocation proportion of coal industry.
The price of double coke has increased significantly this week, and the price support in the later stage is expected to be sufficient. This week, the customs clearance volume of Imported Coking Coal in Outer Mongolia gradually rebounded to the level of more than 200 vehicles, but the inventory level of coking coal in Chinese ports is low, the price of coking coal has increased significantly this week, and the price of coke in the downstream has been raised for many rounds. The coking coal is mainly under the pattern of weak supply and demand, and the blast furnace operating rate of downstream steel mills has increased significantly, especially under the steady growth of policies, the market has strong expectations for the increase of demand in the future, The rising price of coking coal promotes the continuous price increase of coke. Due to the impact of environmental protection and the safety and environmental protection of main producing areas, there is no obvious marginal improvement expectation for the supply. In the medium and long term, the new capacity of coking coal is still insufficient. Recently, affected by the epidemic, it is expected to strengthen the management of border ports, and restrict the import of coking coal with high dependence. After the price rise of double coke, we believe that the fundamentals are sufficient and the risk of sharp decline in the short term is low.
Investment suggestion: recommend power coal leader Shaanxi Coal Industry Company Limited(601225) , Gansu Power Coal leader Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) .
Risk tip: downside risk of economic growth, mismatch risk of supply and demand, impact of extreme weather and coal policy are not as expected.
