Market review this week:
CITIC coal index closed at 3306.7 points, up 5.04%, outperforming the Shanghai and Shenzhen 300 index by 6.04pct, ranking No. 1 in the rise and fall list of CITIC sector. On Friday, there were large fluctuations in the coal sector. We think it is the normal release of the sentiment of the sector after reaching the extreme. Under the background of basically facing the good, each adjustment is regarded as an opportunity to increase the layout.
Analysis of key areas:
Power coal: when Beigang goes to the warehouse, the coal price is difficult to fall deeply. Coal prices fell first and then stabilized this week. As of Friday, the mainstream quotation of port q5500 was about 11401160 yuan / ton, down 110140 yuan / ton on a weekly basis. In terms of origin, the supply of coal mines maintained a growth trend this week. Affected by the epidemic and the rise of temperature, the terminal coal consumption demand was not strong. Due to the superposition of traffic control in the epidemic area, the transportation was limited. Most coal mines shipped generally, the inventory pressure increased, some coal mines had top warehouses, and the price continued to bear the pressure downward. In terms of ports, due to the accident on Daqin line, the transfer in volume decreased slightly; Due to the continuous decline of port coal price and the overhaul of Daqin line in May, the bullish sentiment increased slightly due to the accident of Daqin line, and the inquiry of some downstream traders increased; Moreover, the inventory of power plants in Fujian and Guangdong provinces is at a historically low level, the demand for replenishment is strong, and the transfer out volume increases; The transfer in was less than the transfer out, and the inventory in Beigang began to decline. Downstream, the temperature rose, the epidemic disturbance, and the daily consumption remained low. This week, the weather has gradually warmed up and the epidemic has occurred in many places, affecting the shutdown of some industries in the downstream. The demand for electricity is relatively weak. Superimposed on the power of new energy such as Nanfang hydropower, the market demand is weak. The terminal daily consumption in the eight coastal provinces remains at the level of 1.6 million tons, and the terminal bidding pallets have increased slightly, but most power plants mainly purchase long-term cooperative coal. In terms of import, with the high reduction of international thermal coal prices, the price of overseas coal converted to China is still upside down, and the import volume continues to decline. On the whole, although the Daqin Railway was reopened on April 15 due to an accident, it is difficult to maintain full capacity in a short time due to factors such as detection, trial operation and commissioning, and the spring inspection time of the railway may be advanced, which will have an adverse impact on the transfer in of the port; And the import is still slightly upside down, and the port will maintain a low inventory state. If the problem of low inventory along the coast cannot be solved, even if we enter the off-season, the coal price will rise again after the periodic decline, maintaining the view that it is difficult for the coal price to fall smoothly and sharply in the off-season. In addition, the national development and Reform Commission issued the relevant information on further improving the coal market price formation mechanism, proposing a reasonable range of medium and long-term transaction prices, which will be implemented from May 1, 2022. In the short term, we need to pay attention to policy risks.
Coking coal: wait for demand to start under low inventory. This week, the supply of coking coal market was reduced, the downstream procurement was more active, the coal mine quotation was mostly high, and the coking coal market was strong. As of Friday, the Shanxi main coke of Jingtang Port had closed at 3350 yuan / ton, unchanged on a week-on-week basis. This week, due to positive cases in many places in Shanxi, the shipment of outward coal was seriously blocked, and the coal mine inventory continued to accumulate; Recently, the emergency management department of Shanxi Province recently issued a notice requiring that it is strictly prohibited to organize production beyond capacity, intensity and staffing, and some mining areas reduce production slightly; In addition, coal mines in Shandong and Shaanxi have reserve tasks, and the supply of coking coal market is limited. In terms of importing Mongolian coal, the epidemic situation has gradually eased. Affected by the sentiment of China’s coking coal market, traders have high enthusiasm for transportation, and the overall customs clearance volume has increased. According to sxcoal data, the customs clearance this week (4.11-4.14) lasted for 4 days, with an average of 216 vehicles per day, an increase of 7 vehicles per day compared with the same period last week. The overall market is temporarily stable. At present, the mainstream quotation of Mongolian 5 raw coal is 25 Changzhou Qianhong Biopharma Co.Ltd(002550) yuan / ton. On the demand side, the demand of coke steel enterprises for raw coal is OK, but the epidemic situation is repeated all over the country, the resistance of coal transportation is large, the arrival of raw coal of coke steel enterprises is poor, most of the raw coal in some plants are passively lowered, and the demand for subsequent replenishment is strong. In the short term, there is still room for improvement in downstream demand. With the superposition of low inventory of coke steel enterprises and sufficient power for downstream active replenishment, the price of coking coal will rise strongly again.
Coke: under the influence of the epidemic, supply and demand are separated, and coke is expected to start the sixth round of increase. This week, the fifth round of increase of coke enterprises was implemented. This round of increase was 200 yuan / ton, with a cumulative increase of 1000 yuan / ton. On the supply side, the epidemic situation in Shanxi is repeated, most areas are under strict control, logistics and transportation are blocked, coke enterprises have difficulty in purchasing coke coal, the raw material inventory of some coke enterprises has reached a low level, and some coke enterprises limit production due to insufficient arrival of raw materials; Coke shipments are blocked to varying degrees, and coke enterprises continue to accumulate inventory. On the demand side, the downstream steel mills have gradually resumed production, the utilization rate of blast furnace has increased, and the demand has picked up steadily. However, due to transportation problems, the coke inventory in the plant has continued to decline, and the inventory of some steel mills has been in urgent need, and even the situation of furnace stewing has appeared. On the whole, with the easing of the epidemic and the recovery of hot metal production, there is room for coke prices to rise.
Investment strategy. At present, the window period of annual report and first quarterly report has come. Under the high coal price, the performance of relevant companies has increased significantly. Under the background of declining capital expenditure in the industry year by year, the dividend proportion is expected to increase, and the sector is looking forward to double-click. China will still be based on the basic national conditions dominated by coal, and traditional energy will not withdraw too soon. Under the background of limited room for tapping the potential of new production capacity and stock, the central rise of coal price will contribute to the stable release of performance and valuation repair of coal enterprises. In addition, China Shipbuilding Industry Group Power Co.Ltd(600482) coal, coking coal and coke prices are all global price depressions, and the upside down of prices will significantly affect China’s import volume. Even there is export arbitrage space for some varieties after processing finished products, which will form a strong support for China’s coal prices. Stick to the core assets and be optimistic about the valuation repair of high long-term association and high score red coal enterprises. Key recommendations: China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , Shaanxi Coal Industry Company Limited(601225) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) . In addition, the transformation of traditional energy enterprises under the goal of “double carbon” is worth looking forward to. The key recommendations are power investment energy (green power), Shan Xi Hua Yang Group New Energy Co.Ltd(600348) (energy storage), Huaibei Mining Holdings Co.Ltd(600985) (new materials and green power), Yankuang energy (new materials and green power), Shanxi Meijin Energy Co.Ltd(000723) (hydrogen energy) and China Xuyang group (hydrogen energy). Actively layout the national reform in Shanxi, and focus on recommending Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , with expected asset injection.
Risk tip: China’s output release exceeded expectations, the downstream demand was less than expected, and the on grid electricity price was significantly reduced.
