The demand for thermal coal is basically balanced in the off-season, and the coal performance in the second quarter is expected to increase year-on-year. On the demand side, at present, the power coal market is mainly dominated by supply guarantee and chemical procurement. The daily consumption of power plants is still low, the demand market continues to be depressed, and the downstream inventory level is still low. At present, the willingness of the terminal to replenish inventory is not enough under the high price. Under the guarantee of supply, the total national coal output reached 396 million tons in March, and the average daily output exceeded 12.77 million tons / day, a record high. The supply entered a short-term high level. In March, the coal import was 16.42 million tons, down 39.9% year-on-year. Affected by the overseas energy situation, it is expected that the upside down of imported coal prices will continue, and coal imports will maintain a downward trend. On the whole, the supply and demand of coal consumption will tend to be in tight balance in the off-season. After entering the summer at the end of the second quarter, with the rebound of demand, it is expected that the overall supply and demand pattern will remain tight. Especially with the effective control of the epidemic situation, the “steady growth” will drive the demand, the downstream industrial power consumption will increase, and the demand for coal for thermal power will recover, Coal consumption is expected to maintain a high growth rate. On the whole, the price of thermal coal is expected to gradually stabilize in this quarter, and the high price operation is expected to have a bright performance in the second quarter.
The tight supply and demand situation of coking coal remains, and the supply contraction is greater than the pressure of demand. In terms of coking coal, the market supply and demand has always been tight. The import volume of Outer Mongolia has increased recently, but it is still at a low level. Affected by the epidemic, the transportation of coking coal and coke is limited, the operating rate has decreased, the output has decreased, the raw material inventory of downstream steel mills is mostly at a very low level, and the demand for replenishment is strong. At present, the price of main steel continues to rise slightly, the production enthusiasm of steel mills has not decreased, and the double coke market is in a tense situation, In the short term, the double coke market is still stable, medium and strong. Affected by the overseas situation and the epidemic situation, it is expected that the supply and demand pattern of coking coal will not be significantly improved in the short term. It is expected that the coking sector will continue to maintain a high boom and is still optimistic about the substantial growth of the annual performance of coking coal.
Coal enterprises generally achieved substantial profits in 2021 and are expected to continue to benefit from high coal prices. This week, listed companies such as Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , China Coal Xinji Energy Co.Ltd(601918) , Kailuan Energy Chemical Co.Ltd(600997) and others disclosed their annual reports for 2021. Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) realized a net profit attributable to shareholders of listed companies of 6.708 billion yuan, an increase of 244.80% year-on-year China Coal Xinji Energy Co.Ltd(601918) realized a net profit of 2.434 billion yuan attributable to shareholders of listed companies, with a year-on-year increase of 187.32% Kailuan Energy Chemical Co.Ltd(600997) realized a net profit of 1.815 billion yuan attributable to shareholders of listed companies, with a year-on-year increase of 68.32%. The central rise of coal price in 2021 has brought more than expected profits to enterprises. The tight situation of supply and demand in 2022 remains. Superimposed on the impact of the epidemic and international coal prices, coal prices are expected to remain stable and rise, driving the coal industry to continue to make profits. We are optimistic about the improvement of Industry Valuation and the rapid growth of annual performance.
Investment suggestions: focus on China Shenhua Energy Company Limited(601088) , Yankuang energy, Shaanxi Coal Industry Company Limited(601225) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) .
Risk tip: there is a downside risk of economic growth. The epidemic has led to sluggish demand, blocked transportation and less than expected coal policies.
