Affected by the sharp rise in overseas coal prices, China’s coking coal is expected to make up for the rise. According to wind data, as of March 18, the price of main coking coal in Jingtang Port was 3350 yuan / ton, unchanged on a weekly basis. According to the coal resources network, the production of the main producing areas at the supply side is relatively stable, but some mines are affected by the epidemic control, the transportation is not smooth, and the inventory is slightly accumulated. In the downstream, at present, there are many medium and low raw coal warehouses in the plant of coke steel enterprises, and the demand for raw coal is good. However, due to the continuous tightening of profits and relatively high cost side prices, some coke steel enterprises are relatively cautious about the purchase of raw coal. It is worth noting that affected by the floods in Australia, the railway strike in Canada and the situation in Russia and Ukraine, overseas coal prices continued to rise. The hard coking coal index of Fengjing mine in Australia reached US $693 / ton, a year-on-year increase of 403%, corresponding to RMB 4394 / ton. Considering the value-added tax and freight, the actual CIF price is expected to exceed 5000 yuan / ton, and the price inversion is serious. China has no willingness to receive goods, so it is difficult to supplement China’s coking coal supply. Affected by this, China’s coking coal is also expected to continue to make up.
The tight supply pattern of power coal continued. As of March 18, wind data showed that the market price of q5500 thermal coal in Qinhuangdao port closed at 1520 yuan / ton, down 144 yuan / ton on a weekly basis. This week, affected by the strict investigation of the performance of medium and long-term contracts and the bid up of coal prices, coal prices began to fall. The main producing area of the supply side has stable supply and good sales; On the demand side, although the daily consumption has declined at the end of the heating period, the overall inventory of the power plant is low. Superimposed on the fact that Daqin Railway Co.Ltd(601006) will enter the maintenance period in April, some power plants and chemical users are expected to replenish the inventory in advance. At the same time, international demand increased, overseas coal prices rose sharply, China’s import supplement was limited, and the overall supply remained slightly tight.
Coke prices may still rise. According to wind data, as of March 18, the factory price of Tangshan secondary metallurgical coke closed at 3600 yuan / ton, up 200 yuan / ton on a weekly basis. According to the coal resources network, with the full implementation of the fourth round of coke price increase, the profits of coking enterprises have been repaired and the production enthusiasm has been improved. At the same time, the two sessions have ended, the environmental protection inspection has been relaxed, and the pressure on the short-term supply side has been slightly relieved. On the demand side, the steel plant has fully resumed production, the blast furnace operating rate is high, the inventory continues to maintain low operation, the steel plant’s demand for coke has increased significantly, and the stock replenishment is more active. On the whole, the demand of steel mills recovers faster than the supply, and the short-term coke demand recovers faster than the supply. At the same time, the cost of raw coal supports the coke price, and the coke price is still expected to rise.
Investment suggestions: 1) companies with stable profits and high cash flow are expected to usher in value revaluation. It is recommended to pay attention to Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Shanxi Coal International Energy Group Co.Ltd(600546) , China Shenhua Energy Company Limited(601088) , Shaanxi Coal Industry Company Limited(601225) . 2) The transformation of traditional energy enterprises to new energy has kicked off, and power investment energy and Yankuang energy are recommended. 3) The coking coal sector is expected to benefit from the demand growth driven by infrastructure investment. It is suggested to pay attention to Huaibei Mining Holdings Co.Ltd(600985) , Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) .
Risk tips: 1) risk of economic slowdown. 2) Risk of a sharp fall in coal prices. 3) Risk of policy change.
