The coal price at the place of origin has gradually stabilized. As of January 7, the pithead price of Shaanxi Yulin power lump coal (q6000) was 1010.0 yuan / ton, down 80.0 yuan / ton on a weekly basis and up 395 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 689.0 yuan / ton, with a weekly increase of 9.0 yuan / ton and a year-on-year increase of 79 yuan / ton; Inner Mongolia Dongsheng large clean coal truck plate price (q5500) was 865.0 yuan / ton, down 45.0 yuan / ton on a weekly basis and up 366 yuan / ton on a year-on-year basis. This week, under the influence of the Indonesian export ban, the purchasing sentiment in the downstream picked up, and the number of coal haulers in coal mines increased significantly compared with that before the festival; At the same time, at the end of the year and the beginning of the year, the production task of coal mines was completed, the number of coal mines that stopped production and reduced production increased, the output of coal mines fell, the inventory decreased, and the coal price gradually stabilized.
The mood is rising, the transportation is picking up, and the port inventory is accelerating to fall. This week, 5115 trains arrived from Qinhuangdao Port Railway, with a decrease of 4.09% over the previous week; Qinhuangdao Port handled 408000 tons, a decrease of 8.31% over the previous week. The average weekly inventory level of China’s important ports (Qinhuangdao, Caofeidian and SDIC Jingtang Port) was 10.31 million tons, a decrease of 556000 tons compared with 10.8657 million tons last week, and a decrease of 5.11% on a weekly basis. When the port transfer in was less than the transfer out, the inventory fell faster. As of January 5, the cargo ship ratio (inventory to ship ratio) of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 13.2 (week on week ratio decreased by 1.51), and the downstream transportation has warmed up.
Port coal prices have rebounded, and the international market is stronger than China. As of January 6, the coal inventory of the eight coastal provinces was 33.351 million tons, with a decrease of 83000 tons (a decrease of 0.25%) on a weekly basis. The daily consumption was 2.301 million tons, with a decrease of 12000 tons / day (- 0.52%) on a weekly basis. The available days were 14.5 days, which was flat on a weekly basis. As of January 7, the market price of Qinhuangdao port power coal (q5500) produced in Shanxi was 830.0 yuan / ton, up 10.0 yuan / ton on a weekly basis and down 2.5 yuan / ton on a year-on-year basis. International coal price: as of January 6, the spot price of power coal in Newcastle port was USD 187.5/t, with a weekly increase of USD 16.89/t and a year-on-year increase of USD 106.63/t. As of January 7, the active contract of thermal coal futures increased by 35.0 yuan / ton to 713.2 yuan / ton compared with the same period last week, and the futures discount was 116.8 yuan / ton. As of December 31, the active contract of thermal coal futures fell by 35.6 yuan / ton to 672.2 yuan / ton compared with the same period last week, and the futures discount was 127.8 yuan / ton. The decline of shipping volume from the origin led to the port going to the warehouse. Stimulated by the export ban in Indonesia, the purchase demand was suppressed in the early stage. In the short term, the daily consumption of the power plant will remain high, superimposed with the support of non power demand, and the coal price is still expected to rise. However, with the Spring Festival approaching and the inflection point of daily consumption approaching, the procurement demand of the power plant cannot be sustained under the current inventory level. It is expected that the increase of coal price will gradually slow down after the release of phased demand.
Coke: there is still room for improvement in the short term. The sustainability depends on the rhythm of replenishment in the downstream. As of January 7, 2022, Fenwei CCI Luliang Zhun and metallurgical coke reported 2760 yuan / ton, with a weekly increase of 200 yuan / ton and a year-on-year increase of 410 yuan / ton; CCI Rizhao quasi primary metallurgical coke reported 3030 yuan / ton, with a weekly increase of 200 yuan / ton and a year-on-year increase of 180 yuan / ton. This week, environmental protection and production restriction were relaxed, steel mills resumed production, actively purchased coke, and the coke inventory at the end of steel enterprises increased slightly, but the available days are still declining; With the recovery of downstream demand, coke enterprises started to pick up and inventory increased. At the same time, traders had high enthusiasm for operation and port coke inventory rose simultaneously; In the short term, there is still room for coke prices to rise, and the sustainability depends on the rhythm of replenishment by downstream steel enterprises.
Coking coal: the price is strong, and the medium and long-term scarcity is expected to be gradually priced. As of January 6, CCI Shanxi low sulfur index was 2555 yuan / ton, with a weekly increase of 135 yuan / ton and a year-on-year increase of 1049 yuan / ton; Shanxi’s high sulfur index was 2073 yuan / ton, with a weekly increase of 86 yuan / ton and a year-on-year increase of 952 yuan / ton; Lingshi fat coal index reported 2200 yuan / ton, with a weekly increase of 200 yuan / ton and a year-on-year increase of 1150 yuan / ton; Puxian 1 / 3 coke index was 1900 yuan / ton, unchanged on a week-on-week basis, with a year-on-year increase of 700 yuan / ton. Recently, the coal mines that stopped production for maintenance before New Year’s day gradually resumed production, but the customs clearance of Mongolian coking coal is still limited; At the same time, downstream steel coke enterprises increased their purchasing enthusiasm due to the replenishment of storage in winter, supporting the rise of coking coal prices this week. In the medium and long term, the newly-built coking coal mines are insufficient, the depletion of resources is becoming more and more prominent, the supply side will shrink significantly, and the price of supporting coking coal is easy to rise but difficult to fall; With the change of demand structure for coking coal due to the large-scale blast furnace and coke oven, high-quality coking coal (main coke, fat coal, etc.) resources are more scarce.
We believe that at present, we are at the initial 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 plate is at the right time. At present, the legalization of China’s coal off balance sheet capacity is coming to an end: the space for nuclear increase / approval capacity converges rapidly and the threshold for nuclear increase is raised, limiting the short-term production potential of coal enterprises; Considering the decline of coal enterprises\’ willingness and ability to build mines and the construction cycle of more than 3 years, coal supply may be difficult to respond to demand growth during the 14th Five Year Plan period, and the price will remain high. Under the general cost reduction, efficiency increase and endogenous epitaxial growth of the industry, corporate profits are expected to rise. At the same time, on November 17, the national standing committee decided to set up a 200 billion refinance to support the clean and efficient utilization of coal; In December, the central economic work conference reiterated that “based on the basic national conditions dominated by coal, we should pay attention to the clean and efficient utilization of coal, increase the consumption capacity of new energy, and promote the optimal combination of coal and new energy.” In the upward trend of the industry boom, the leading coal enterprises rely on their own resource / capital / technology endowment advantages to promote the energy revolution, layout transformation and upgrading, new growth poles or repay shareholders, and can improve the income level of investors in the long term. 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 the industry’s performance in the fourth quarter and the first half of next 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, Shaanxi Coal Industry Company Limited(601225) , China Shenhua Energy Company Limited(601088) , the leader of low value and high dividend power coal; The second is Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Guizhou Panjiang Refined Coal Co.Ltd(600395) with both resource scarcity and significant growth; Third, the Shanxi Coking Coal Energy Group Co.Ltd(000983) and Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) with great extension expansion potential brought by the improvement of asset securitization rate of state-owned coal group.
Risk factors: coal mine safety production accidents in key companies; Downstream energy and power consumption departments continue to limit production on a large scale; The macro economy has stalled and declined sharply.
