Summary of this issue:
The supply and demand of producing areas are booming, and the coal price continues to rise. As of January 14, the pithead price of Shaanxi Yulin power lump coal (q6000) was 1080.0 yuan / ton, up 70.0 yuan / ton week on week, up 465 yuan / ton compared with the same period last year; The pit mouth price of sticky coal (including tax) (q5500) in the southern suburb of Datong was 776.0 yuan / ton, an increase of 87.0 yuan / ton on a weekly basis, an increase of 81 yuan / ton over the same period last year; Inner Mongolia Dongsheng large clean coal truck sector price (q5500) was 897.0 yuan / ton, up 32.0 yuan / ton week on week, up 356 yuan / ton compared with the same period last year. At present, the supply guarantee policy has not been withdrawn, Inner Mongolia Eerduosi Resources Co.Ltd(600295) daily output has increased to nearly 2.9 million tons, and the supply remains high. On January 12, the national unified dispatching power plant stored more than 162 million tons of coal, which can be used for 21 days, 40 million tons higher than the same period last year, the highest level in the same period in history. The coal supply capacity and coal storage level of power plants are high. According to the policy requirements, the power coal inventory of power plants in the guarantee area before the Winter Olympic Games should be increased to more than 30 days, and the replenishment of inland power plants actively supports the short-term coal price.
The port throughput rebounded and the inventory level continued to decline. This week, the arrival volume of Qinhuangdao Port Railway decreased by 167 to 4948 compared with the same period last week, a month on month decrease of 3.26%; The port throughput of Qinhuangdao port increased by 42000 tons to 450000 tons compared with the same period last week, an increase of 10.29% month on month. The inventory of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 11.42 million tons (decreased by 980000 tons), the number of anchorage ships was 103 (increased by 6), the cargo ship ratio (inventory to ship ratio) was 9.2 (decreased by 1.34), and the downstream transportation continued to rise.
With the increasing uncertainty of imported coal, the importance of energy security is highlighted, and there is limited room for port coal prices to fall during the Spring Festival. As of January 13, the coal inventory of the eight coastal provinces was 32.901 million tons, a decrease of 450000 tons compared with last week and a decrease of 1.35% on a weekly basis; The daily consumption was 2.247 million tons, a decrease of 54000 tons / day compared with last week, and a decrease of 2.35% on a weekly basis; The available days were 14.6 days, up 0.10 days from last week. As of January 14, the market price of Qinhuangdao port power coal (q5500) produced in Shanxi was 945.0 yuan / ton, up 115.0 yuan / ton on a weekly basis and 2.5 yuan / ton on a year-on-year basis. As of January 13, the spot price of power coal in Newcastle port was US $216.6/t, up US $29.16/t on a weekly basis and US $147.16/t on a year-on-year basis. As of January 14, the active contract of thermal coal futures fell by 20.8 yuan / ton to 692.4 yuan / ton compared with the same period last week, and the futures discount was 252.6 yuan / ton. As the Spring Festival approaches, downstream enterprises have holidays one after another, and industrial power consumption begins to weaken; With the decline of daily consumption, the days available for coal storage in the power plant will increase to a high level, the downstream procurement demand will decrease, and the rise of coal price will slow down and gradually fall back. At the same time, after restricting the import of Australian coal, Indonesia phased banned coal export, highlighting the limited space and increased uncertainty for imported coal to supplement China’s supply and demand gap, and the current CIF price of imported coal is higher than that of China, thus losing economy. Therefore, the coastal downstream may maintain active procurement of Chinese coal, and there is limited room for the fall of port coal price during the Spring Festival.
Coke: Coke continued its strong performance. As of January 14, 2022, Fenwei CCI Luliang quasi primary metallurgical coke reported 2960 yuan / ton, with a weekly increase of 200 yuan / ton and a year-on-year increase of 510 yuan / ton. Port index: CCI Rizhao quasi primary metallurgical coke reported 3150 yuan / ton, with a weekly increase of 120 yuan / ton and a year-on-year increase of 270 yuan / ton. Affected by the stock replenishment before the festival and the steel plant’s resumption of work exceeding expectations, coke enterprises shipped smoothly, and the inventory in the plant continued to maintain a downward trend; As the profits of coke enterprises began to repair, the start-up increased slightly, but the supply increment was limited. At the same time, considering the increase of cost support, the coke market continued to operate in a strong pattern.
Coking coal: coking coal prices continue to rise. As of January 13, CCI Shanxi low sulfur index was 2755 yuan / ton, up 200 yuan / ton on a weekly basis and 465 yuan / ton on a monthly basis, up 1239 yuan / ton on a year-on-year basis; CCI Shanxi high sulfur index was 2173 yuan / ton, up 100 yuan / ton on a weekly basis and 450 yuan / ton on a monthly basis, up 1038 yuan / ton on a year-on-year basis; Lingshi fat coal index was 2250 yuan / ton, unchanged on a weekly basis, with a month on month increase of 500 yuan / ton and a year-on-year increase of 1140 yuan / ton; Puxian 1 / 3 coke index was 2300 yuan / ton, up 400 yuan / ton on a weekly basis and 650 yuan / ton on a monthly basis, up 1100 yuan / ton on a year-on-year basis. Near the end of the year, the safety inspection of the production area is strict, and the production of coal mines in various places is limited in varying degrees. In addition, the customs clearance trains of Mongolian coal have always maintained a low level, the overall supply of coking coal is relatively tight, and the demand for raw coal in the downstream is good, supporting the continuous good operation of coking coal prices. 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 sector 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 good, and the valuation of the sector is repaired and improved. Considering the certainty of high performance growth in the first half of this 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; Second, Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Guizhou Panjiang Refined Coal Co.Ltd(600395) with both scarcity of resources 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.
