Thermal coal may have a downward trend in the short term, but the overall decline is limited. As of March 25, wind data showed that the market price of q5500 thermal coal in Qinhuangdao port closed at 1575 yuan / ton, up 55 yuan / ton on a weekly basis, but it has fallen on Friday. This week, the coal mines at the origin began to strictly investigate the performance of medium and long-term contracts. Therefore, the production gave priority to the protection of medium and long-term contracts, and the spot resources decreased, but the downstream cement and chemical procurement demand did not decrease, and the coal price at the origin continued to rise. Although the supply of goods in the port is still tight, the market sentiment has weakened and the quotation has been reduced. However, considering the current impact of the epidemic, the scope of downstream shutdown is expanded, and the superposition enters the off-season of traditional coal consumption, the demand shows a downward trend in the short term, and there is a possibility of decline in the short term. However, the upstream and downstream inventories are low, and the spot resources are still tight under the background of the long-term insurance association, and the decline is expected to be limited. After entering April, thermal coal gradually entered the off-season, and the price trend is expected to be dominated by shock.
The epidemic affects transportation, and the coking coal market is weak in the short term. According to wind data, as of March 25, the price of main coking coal in Jingtang Port was 3350 yuan / ton, unchanged on a weekly basis. According to the coal resources network, this week, Inner Mongolia was affected by the entry inspection of the environmental protection group, and the supply was slightly tightened. In terms of demand, due to the impact of the epidemic, the transportation of coal mines across provinces is limited, the phenomenon of furnace stewing occurs in coking plants in some areas with serious epidemic, and the procurement slows down. At the same time, coke steel enterprises that are not affected by the epidemic are mainly purchased on demand due to the relatively high price of some coal at the cost side. In terms of import, the recent epidemic situation in Mongolia has been well controlled, and overseas marketable resources have increased. However, on the one hand, the price is still expensive, on the other hand, China’s coking coal market has cooled down, and the enthusiasm for procurement is still weak. On the whole, the price of coking coal is expected to be stable temporarily in the short term, and some coal types with relatively high price will be adjusted and operated. It is expected that after April, as the epidemic situation is effectively controlled, there is still some room for prices to rise.
Coke market may be stable and weak. According to the coal resources network, the coke market sentiment weakened this week due to the escalation of epidemic prevention and control. Due to the interruption of automobile transportation and the shortage of railway transportation capacity, coking enterprises accumulate storage passively. In the downstream, the epidemic control measures in the main producing areas of steel mills are relatively strict. Some steel mills are forced to stop limiting production due to the difficulty of replenishing raw materials and the continuous rise of finished product inventory. Most of the other steel mills maintain normal production and the demand for coke procurement remains unchanged. Overall, the overall wait-and-see mood of the market is strong, and it is expected that the coke market will operate stably and weakly as a whole.
Investment suggestions: 1) companies with stable profits and high cash flow are expected to usher in value revaluation. It is suggested 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.
