The wait-and-see mood in the downstream continues, and the price of thermal coal continues to be under pressure. As of April 15, the pithead price of Shaanxi Yulin power lump coal (q6000) was 1110.0 yuan / ton, down 50.0 yuan / ton on a weekly basis; The pit mouth price of sticky coal (including tax) (q5500) in the southern suburb of Datong was 945.0 yuan / ton, down 55.0 yuan / ton on a weekly basis; Inner Mongolia Dongsheng large clean coal truck sector price (q5500) was 885.0 yuan / ton, down 61.0 yuan / ton on a weekly basis. The suppression of the epidemic has led to insufficient industrial power consumption, low load of thermal power plants, loose relationship between supply and demand, combined with the frequent impact of recent regulatory policies, and the price of thermal coal in the producing area continues to be under pressure.
Port inventory is under pressure. On April 14, 6717 trains arrived on Qinhuangdao Port Railway, an increase of 30.55% over the previous week; Qinhuangdao Port handled 536000 tons, an increase of 27.32% over the previous week. As of April 15, the inventory of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 12.06 million tons (down 390000 tons on a weekly basis), the number of anchor ships was 100 (down 26 on a weekly basis), and the cargo ship ratio (inventory to ship ratio) was 12.06 (up 1.33 on a weekly basis). Affected by the Daqin Railway Co.Ltd(601006) train collision accident, the number of arriving vehicles in Qinling port will decline, and the port inventory will be under pressure in the short term. At present, the rescue work is progressing smoothly. However, as Daqin Railway Co.Ltd(601006) will enter the maintenance period in early May, the shipping capacity will decline. It is expected that the impact of the accident on the port inventory will be difficult to make up.
Compared with the same period in previous years, the coal consumption in coastal provinces is running at a medium and high level, and the suppression factors of the epidemic on coal consumption are weaker than expected. As of April 14, the coal inventory of the eight coastal provinces was 28.755 million tons, with a week on week increase of 661000 tons (2.35%), the daily consumption was 1.653 million tons, the week on week decrease of 22000 tons / day (- 1.31%), the available days were 17.4 days, and the week on week increase of 0.60 days. As of April 15, the market price of Qinhuangdao port thermal coal (q5500) produced in Shanxi was 1168.0 yuan / ton, down 140.0 yuan / ton on a weekly basis. International coal price: as of April 13, the FOB spot price of Newcastle newc5500 kcal thermal coal was 194.95 US dollars / ton, up 2.55 US dollars / ton on a weekly basis; The spot price of ara6000 kcal thermal coal was 345.05 US dollars / ton, up 55 US dollars / ton on a weekly basis; Richard RB's FOB spot price of thermal coal was US $272.25/ton, up US $35.3/ton on a weekly basis. As of April 15, the active contract of thermal coal futures increased by 13.6 yuan / ton to 820.0 yuan / ton compared with the same period last week, and the futures discount was 348.0 yuan / ton.
Coke: the impact of the epidemic on shipments remains the same. As of April 15, 2022, Fenwei CCI Luliang quasi primary metallurgical coke reported 3560 yuan / ton, which was flat on a weekly basis, up 6.00% on a monthly basis and 92.43% on a year-on-year basis. Port index: CCI Rizhao quasi primary metallurgical coke reported 4020 yuan / ton, up 170 yuan / ton on a weekly basis, 12.30% on a monthly basis and 81.08% on a year-on-year basis. At present, the overall production of steel mills is booming, but the blocked shipment caused by the epidemic still has an impact on the supply and demand of coke market. Insufficient shipment has led to the passive drop of coke in some downstream steel mills.
Coking coal: the downstream demand does not decrease, and the price continues to rise. As of April 15, CCI Shanxi low sulfur index was 3440 yuan / ton, up 135 yuan / ton on a weekly basis and 105 yuan / ton on a monthly basis; CCI Shanxi high sulfur index was 2997 yuan / ton, up 47 yuan / ton on a weekly basis and 57 yuan / ton on a monthly basis; Lingshi fat coal index was 2950 yuan / ton, unchanged on a weekly basis and increased by 250 yuan / ton on a monthly basis. The stock of raw coal of downstream coke enterprises decreased, which formed a strong support for the demand for coke coal, and the price of coke coal operated strongly.
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. Judging from the coal consumption and inventory level of each province, the coal consumption level of 17 inland provinces less affected by the epidemic is higher than that of the same period in 20192021; The coal consumption and inventory of the eight coastal provinces are close to the level of the same period without the epidemic in 2019, and the suppression factor of the epidemic on coal demand is weaker than expected. According to the electricity consumption data of the whole society released by China Electricity Council, from January to March, the electricity consumption of the secondary industry, the tertiary industry and residents increased by 3%, 6.2% and 11.8% respectively year-on-year, which once again confirms our conclusion in the report analysis and Prospect of electric power 20222025: "the rapid development of emerging industries, the substitution of electric energy and the increase of the proportion of residents' domestic electricity consumption will enhance the demand elasticity and growth toughness of China's electricity consumption of the whole society". In the future, with the gradual entry into force of epidemic control, the elimination of repressive factors in production and consumption, the demand for electricity and coal will increase significantly, and the pattern of coal supply and demand will return to a tense state. 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 a reasonable 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; Downstream energy and power consumption departments continue to limit production on a large scale; The macro economy has fallen sharply.
