The price of power coal pit remains high. As of March 19, the pithead price of Shaanxi Yulin power lump coal (q6000) was 1210.0 yuan / ton, up 70.0 yuan / ton on a weekly basis and 700 yuan / ton on a year-on-year basis; The pit mouth price of sticky coal (including tax) (q5500) in the southern suburb of Datong was 1025.0 yuan / ton, up 10.0 yuan / ton on a weekly basis and 568 yuan / ton on a year-on-year basis; Inner Mongolia Dongsheng large clean coal truck sector price (q5500) was 1047.0 yuan / ton, unchanged on a weekly basis, up 626 yuan / ton compared with the same period last year.
The downstream transportation is weak, and the procurement is reduced, mainly on the sidelines. This week, there were 6405 arriving trains of Qinhuangdao Port Railway, with a decrease of 6.41% on a weekly basis; Qinhuangdao Port handled 504000 tons, down 8.86% from the previous week. As of March 16, the inventory of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 11.38 million tons (an increase of 99000 tons on a weekly basis), the number of anchorage ships was 95.0 (a decrease of 7.00 on a weekly basis), and the cargo ship ratio (inventory to ship ratio) was 7.5 (an increase of 0.95 on a weekly basis).
The decline in daily consumption was less than expected, and it was difficult for coal inventories in all provinces to rise. As of March 17, the coal inventory of the eight coastal provinces was 26.894 million tons, with a decrease of 1.389 million tons (a decrease of 4.91%) on a weekly basis. The daily consumption was 1.826 million tons, a rise of 35000 tons / day (1.95%) on a weekly basis, and the available days were 14.7 days, with a decrease of 1.10% on a weekly basis. As of March 18, the market price of Qinhuangdao port thermal coal (q5500) produced in Shanxi was 940.0 yuan / ton, unchanged on a weekly basis. International coal price: as of March 16, the FOB spot price of Newcastle newc5500 kcal thermal coal was US $299.65/ton, down US $3.05/ton on a weekly basis; The spot price of ara5500 kcal thermal coal was US $306.06/t, down US $91 / T on a weekly basis; The FOB spot price of Richard RB thermal coal was US $222.8/t, down US $179.6/t on a weekly basis. As of March 18, the active contract of thermal coal futures increased by 11.0 yuan / ton to 829.0 yuan / ton compared with the same period last week, and the futures premium was 829.0 yuan / ton. Overseas thermal coal prices return to the rational range, but they are still at a historical high, which is difficult to supplement China’s coal gap.
Coke: since the end of last month, it has increased by 800 yuan, and the fundamentals of supply and demand are expected to improve. As of March 18, 2022, Fenwei CCI Luliang quasi primary metallurgical coke reported 3360 yuan / ton, with a weekly increase of 200 yuan / ton, a monthly increase of 31.25% and a year-on-year increase of 63.90%. Port index: CCI Rizhao quasi primary metallurgical coke reported 3580 yuan / ton, down 50 yuan / ton on a weekly basis, up 21.35% on a monthly basis and 64.97% on a year-on-year basis. The price of coke has risen by 800 yuan since the end of last month. With the recovery of coke enterprises’ willingness to return to work, if the epidemic situation is effectively controlled in the future and coke logistics returns to normal, it is expected that the supply and demand pattern of steel coke is expected to be significantly improved.
Coking coal: market attitude differentiation. As of March 10, 2020, CCI Shanxi low sulfur index was 3335 yuan / ton, unchanged on a weekly basis and increased by 917 yuan / ton on a monthly basis; CCI Shanxi high sulfur index was 2940 yuan / ton, up 27 yuan / ton on a weekly basis and 884 yuan / ton on a monthly basis; Lingshi fat coal index was 2700 yuan / ton, unchanged on a weekly basis and increased by 750 yuan / ton on a monthly basis; Puxian 1 / 3 coke index was 2300 yuan / ton, down 200 yuan / ton on a weekly basis and up 400 yuan / ton on a monthly basis. After the substantial rise of coking coal in the early stage, some traders and coal washing plants began to actively ship. On the whole, market participants’ fear of heights has increased, the wait-and-see mood has increased, and the price inflection point is expected to appear.
We believe that at present, we are in the early stage of a new round of upward cycle of coal economy, and the fundamentals, policies and companies resonate. At this stage, the allocation of coal sector is at the right time. According to our in-depth report 20202025 power analysis and outlook released in the middle of the week, with the increase in the proportion of residents’ domestic power consumption and the development of emerging industries such as digital new infrastructure, new energy vehicles and integrated circuit manufacturing, the growth rate of power consumption in China’s whole society will remain at a high level in the next 3-5 years. Considering that the development prospect of new energy is bright, but it needs a long time cycle, and the current proportion in the power and energy structure is still very low, the high increase of power consumption will form a strong support for the continuous growth of coal demand, and the continuous exceeding expectation of power demand will drive the continuous exceeding expectation growth of coal consumption. At the end of the current heating season, coal consumption has entered the off-season. However, from the perspective of upstream production increase performance and the new pattern of overseas supply and demand, China’s coal supply increment is still insufficient, and the tight balance pattern of demand will not change in the medium and short term. In the next 2-3 months, as all parts of the South enter the peak summer stage, coal supply will still face great pressure. At this stage, the industry fundamentals, the underlying logic of the policy and the direct effect are favorable for the repair and improvement of the valuation of the sector. Considering the certainty of the high growth of performance in the first half of this year, it is the best stage for bargain hunting to allocate the coal sector. Investment rating: we continue to look at the coal sector in an all-round way and continue to suggest paying attention to the historic allocation opportunities of coal. It is suggested to pay attention to three main investment lines: first, Yankuang energy, the leader of low value and high dividend power coal, Shaanxi Coal Industry Company Limited(601225) , China Shenhua Energy Company Limited(601088) ; Second, Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Guizhou Panjiang Refined Coal Co.Ltd(600395) , which are both resource scarcity and significant growth; Third, Shanxi Coking Coal Energy Group Co.Ltd(000983) and Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , which have great potential for extensive expansion brought by the increase of asset securitization rate of state-owned coal group.
Risk factors: coal mine safety production accidents in key companies; The macro economy has fallen sharply.
