Investment strategy: from the supply side, China’s current coal output is more than 12 million tons / day, and there is little room for further improvement. Superimposed on the shortage of coal sources in the Asia Pacific region, the inversion of imported coal prices is serious, and the overall coal source is tight. On the demand side, the current market is worried about the disturbance of economic demand. We believe that the willingness of policy to stabilize growth is strong. The epidemic has only affected the rhythm of demand. The direction is forward and the road is tortuous. On the policy side, recently, the national development and Reform Commission deployed to carry out special verification on the signing and performance of medium and long-term coal contracts to promote the construction of 300 million tons of effective production capacity, which reflects the reality of China’s supply shortage and the expectation of continuous tightening of imported coal. In terms of price and profit, March April is the off-season of thermal coal, but at present, there is a large demand for replenishment of storage and it is difficult to supplement imports. The callback range of coal price is expected to be controllable and limited. The Q1 performance of coal enterprises is expected to be very bright, the price of Q2 long-term association is difficult to retreat, and the Q2 performance is expected to continue to be high. 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) . Anthracite recommended attention: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . 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 thermal coal: the price will stabilize after a slight decline. Affected by the government regulation this week, the price of Kengkou port fell slightly after rising continuously, and stabilized near the weekend. In terms of supply, the production of most coal mines in the main producing areas is stable, and a few coal mines have stopped production or reduced production. Beigang’s inventory is passively accumulated due to the weather, but the spot coal market is still tight. In terms of import, Japan, South Korea and other countries have strong demand. Considering the approaching Ramadan in Indonesia, Indonesia’s coal supply will be tightened, and the short-term imported power coal price is still supported. In terms of demand, with the end of the heating period, the load of some power plants has decreased. In addition to the just needed procurement, the replenishment of storage has been postponed. However, the actual inventory of the power plant is low, and there is still a demand for replenishment at the terminal. In the follow-up, we still need to pay attention to the impact of the overhaul of Daqin line in April (expected to be 4.8-5.8) and the impact of Russia Ukraine problem on the international coal market.
Summary and Prospect of coking coal: downstream production is still recovering, and international coal prices are still rising. As of March 18, 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 0.51% on a weekly basis, continuing the upward trend and serious upside down. In terms of supply, the start-up of the production area was stable this week, the output of some early-stage coal mines was small, and the production of coal mines returned to the normal level, but the overall supply side continued to be tight; International supply is affected by floods in Australia and strikes in Canada, and coking coal prices are still high. In terms of importing Mongolian coal, Ganqi Maodu port passed Customs on the 3rd of this week, with an average daily customs clearance of 191 vehicles (week on week + 17 vehicles), the customs clearance volume continued to rise at a low level, and the quotation still rose. In terms of demand, the production of steel mills in coking plants is still recovering. Due to the increased fear of heights in the downstream, traders’ enthusiasm for taking goods is weakened, the procurement of coke enterprises is slowed down, and the flow auction situation is increasing. After that, we will continue to pay attention to the production and downstream demand of coke enterprises.
Coke summary and Outlook: four rounds of rising and landing, and there are still bullish expectations in the future. As of March 18, the price of secondary metallurgical coke in Tangshan was 3600 yuan / ton. The downstream steel mills accepted the fourth round of increase of 200 yuan / ton, and the cumulative increase of coke was 800 yuan / ton. In terms of supply, after the two sessions, the production restriction was gradually relaxed, the profits were repaired after continuous price increases, the production enthusiasm of coke enterprises was good, and the operating load was increased. In terms of demand, after the winter Paralympic Games, the downstream steel mills gradually resumed production, and the demand rebounded rapidly. However, under the influence of the epidemic, the market transportation capacity was blocked, superimposed coke foreign trade orders to divert the source of goods, the arrival of steel mills was poor, and it was difficult to replenish the warehouse. On the whole, the short-term coke supply and demand pattern continues to be tight, and the coke price is still rising. In the follow-up, we will continue to pay attention to the shipment and production of the steel plant.
Power coal: the price of coal in the port decreased and the inventory in the port increased. (1) As of March 18, the price of 5500 kcal Shanxi thermal coal was 1520 yuan / ton, with a decrease of 144 yuan / ton on a weekly basis. (2) As of March 4, the price of power coal in Newcastle was US $347.90/ton, up 42.4% week on week. (3) From March 14 to 18, the average transfer in volume of Qinhuangdao port railway was 534000 tons, with a decrease of 5000 tons compared with the surrounding area. The average throughput of Qinhuangdao coal port was 514000 tons, with a decrease of 13000 tons on a weekly basis. (4) As of March 18, the inventory of Qinhuangdao port was 5.14 million tons, an increase of 120000 tons on a weekly basis. The coal inventory in the Yangtze River Estuary was 2.49 million tons, an increase of 100000 tons on a weekly basis
Coking coal: the price of coking coal in China has risen, and the inventory of coking plants has increased month on month. (1) As of March 18, the price increase (including tax) of Shanxi main coke coal depot in Jingtang Port was 3350 yuan / ton, unchanged on a week on week basis. (2) As of March 17, the price of hard coking coal in Fengjing mine was US $693.05/ton, up 0.51% on a weekly basis; The price of low volatile injection coal was US $311 / ton, up 3.67% on a weekly basis. (3) As of March 18, the total inventory of coking coal in China’s independent coking plants (100) was 11.534 million tons, with an increase of 116000 tons on a weekly basis, 15.50 days of available coking coal and a decrease of 0.30 days on a weekly basis.
Coke: the price rose month on month, and the operating rate of coking plant increased. (1) As of March 18, the price of secondary metallurgical coke in Tangshan was 3600 yuan / ton, up 200 yuan / ton on a weekly basis. (2) The coke oven productivity of China’s independent coking plants (100) was 76.90%, and the cycle to cycle ratio increased by 2.30%; (3) As of March 18, the operating rate of major rebar mills in China was 55.74%, with a week on month increase of 0.66%. (4) As of March 18, the coke inventory of China’s sample steel plants (110) was 7.4678 million tons, an increase of 260400 tons on a weekly basis; As of March 18, 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 644000 tons, an increase of 26000 tons on a weekly basis.
Review of industry highlights: (1) two coal mine accidents occurred in Yunnan Province and two people died in one day; (2) the conflict between Russia and Ukraine had a significant impact on the international coking coal and injection coal market; (3) the raw coal output of Datong, Shanxi was 150 million tons in 2021; (4) the special railway line for daze mine of China Coal Shaanxi company was officially put into operation; (5) the Minister of electricity of India: the power generation capacity far exceeds the demand, and India will no longer face the power crisis
Risk warning: the economic growth rate is lower than expected; Excessive policy regulation; Renewable energy substitution, etc; Risk of coal import impact.
