Key investment points
Raw coal output in December: it increased by 7.2% year-on-year in a single month, and the average daily output increased by 47000 tons / day month on month. In December, the national output of raw coal above designated size was 385 million tons in that month, with a year-on-year increase of 7.2%, and the cumulative output was 4.07 billion tons, with a year-on-year increase of 4.7%. The daily average raw coal output in December was 12.409 million tons, an increase of 47000 tons / day compared with November 2021. The efforts to ensure supply continued. The monthly output increased by 13.826 million tons (+ 3.73%) month on month, and the daily average output increased by 0.38%.
Coal imports in December: down 21% year-on-year and 11.7% month on month. In December, 30.95 million tons of coal and lignite were imported that month, with a year-on-year decrease of 21% and a month on month decrease of 11.7%. In 2021, 323 million tons were accumulated, with a year-on-year increase of 6.6%.
Based on the data of China's output and import volume in the previous December, the growth rate of China's coal supply in 2021 was + 4.8% (from January to November was + 4.7%).
Fixed asset investment: in December, the growth rate of fixed asset investment in infrastructure, manufacturing and real estate was 3.8%, 11.8% and - 13.9% respectively.
In December, infrastructure investment increased by 3.8% year-on-year, and from January to December, infrastructure investment increased by 0.21%, with a growth rate of 0.38 percentage points higher than that from January to November 2021.
In December, the fixed investment in manufacturing industry increased by 11.8% year-on-year. From January to December, the cumulative fixed investment in manufacturing industry increased by 13.5% year-on-year, and the growth rate decreased by 0.2 percentage points compared with January to December 2021.
In December, the investment in real estate development decreased by 13.9% year-on-year. From January to December, the investment in real estate development increased by 4.4% year-on-year, with a growth rate of 1.6 percentage points lower than that from January to November 2021.
Thermal power industry in December: thermal power output decreased by 4.9% year-on-year, and hydropower decreased by 6.8% year-on-year. In December, China's industrial added value increased by 4.3% year-on-year, and the cumulative growth rate from January to December increased by 9.6% year-on-year. In December, the power generation of the whole society was 723.4 billion kwh, a year-on-year decrease of 2.1% and a month on month increase of 10.6%. The cumulative power generation was 8112.2 billion kwh, a year-on-year increase of 8.1%, and the growth rate was 1.1 percentage points lower than that from January to November of 21. From the perspective of the main power generation entities, the thermal power output in December was 543.3 billion kwh, a year-on-year decrease of 4.9% and a month on month increase of 17%. The thermal power accumulated 5770.2 billion kwh, a year-on-year increase of 8.4%. In December, hydropower output was 71.5 billion kwh, a year-on-year decrease of 6.8% and a month on month decrease of 20.6%. Hydropower accumulated 1184 billion kwh, a year-on-year decrease of 2.5%. Energy consumption control still has a certain impact, and the power generation falls into the negative growth range.
Coke and cement industry in December: coke output in December decreased by 10.7% year-on-year, and cement output decreased by 11.1% year-on-year. In terms of the iron and steel industry chain, the coke output in December was 36 million tons, a year-on-year decrease of 10.7% and a month on month increase of 6.4%. The first round of coke price rise fell to the ground, the operating load rebounded slightly and the output increased. From January to December, 464 million tons of coke were accumulated, with a cumulative year-on-year decrease of 2.2%. The output of pig iron in December was 72.1 million tons, a year-on-year decrease of 5.4%. The cumulative value from January to December was 869 million tons, a year-on-year decrease of 4.3%. In December, the output of crude steel in that month was 86.19 million tons, with a year-on-year decrease of 6.8%. The cumulative value of crude steel was 1.033 billion tons, with a year-on-year decrease of 3%. The downstream demand margin improved, and the start-up of steel mills rebounded slightly. In terms of building materials industry chain, the output of cement in December was 191 million tons, a year-on-year decrease of 11.1%, and the cumulative output of cement was 2.363 billion tons, a year-on-year decrease of 1.2%.
Based on the output data of thermal power, coke and cement in China in the previous December, it is roughly estimated that the growth rate of China's coal demand from January to December is + 4.6% (from January to November is + 4.6%). (assuming that the unit coal consumption remains unchanged, the chemical and other coal consumption remains unchanged, and the demand for thermal power, steel and building materials accounts for 53%, 17% and 13% respectively)
Inventory: in December, the inventory of thermal coal and coke decreased month on month, and the inventory of coking coal increased.
At the end of December, coal mine shutdown and overhaul increased, supply tightened, and power coal storage decreased. By the end of December 2021, the coal inventory of key northern ports (Qinhuangdao + Huanghua Port + Caofeidian + SDIC Jingtang Port) totaled 12.76 million tons, a decrease of 1.06 million tons compared with the end of November 2021. Among them, the coal inventory of Qinhuangdao Port decreased from 5.4 million tons to 4.74 million tons, The inventory of Jingtang Port decreased from 2.28 million tons to 1.74 million tons. In January, the daily consumption continued to rise and the inventory continued to decline. As of January 14, the inventory of key ports in the North was 10.99 million tons, a decrease of 1.77 million tons compared with the end of December and 1.06 million tons compared with the same period last year.
In December, the coke market inventory decreased. By the end of December, the inventory in the plant of 100 coking enterprises (436100 tons), a decrease of 292900 tons compared with that at the end of November 2021. In January, four rounds of coke price increases fell one after another. With the recovery of coke enterprises' profits and the relaxation of environmental protection inspection in some areas, the start-up of coke enterprises rebounded significantly, and the inventory increased to 802800 tons (January 14), An increase of 366700 tons over the end of December and 537900 tons over the same period last year; The storage of coke coal at the coke raw material end increased month on month, and coke enterprises began to actively replenish the storage. As of the end of December, the storage of coking coal in coking plants (100) was 6.6228 million tons, an increase of 470300 tons compared with the end of November 2021. As of January 14, the inventory further increased by 6.263 million tons to 12.8858 million tons, an increase of 2.8109 million tons compared with the same period last year. In December, the first round of coke price increase landed, the coking profit improved, the operating load rebounded, and near the end of the year, the horizontal control of crude steel and the dual control of energy consumption basically ended. At the same time, the secondary early warning of environmental protection was lifted in Tangshan, the downstream demand margin was better, the steel plant started to pick up, the demand just increased, and the market continued to operate in a strong pattern.
Price situation: the prices of thermal coal, coking coal and coke fell month on month in December.
In December, the average market price of q5500 thermal coal produced in Shanxi, Qinhuangdao was 1018 yuan / ton, up 44.31% year-on-year and down 8.30% month on month. The average price from January to December was 1030 yuan / ton, up 78.7% year-on-year (or + 454 yuan / ton). The price of thermal coal fell slightly in December and began to rebound in January. As of January 17, the market price of q5500 thermal coal produced in Shanxi, Qinhuangdao rose to 945 yuan / ton, an increase of 145 yuan / ton compared with the end of December.
In December, the average production of main coking coal in Shanxi of Jingtang Port was 2380 yuan / ton, a year-on-year increase of 48%. The coking coal price in December was relatively stable in the early stage and rebounded slightly at the end of the month, but the overall average price still fell by 994.6 yuan / ton compared with November. The average price from January to December was 2515 yuan / ton, a year-on-year increase of 68.11% (or + 1019 yuan / ton). In January, the price of main coking coal continued to rise to 2830 yuan / ton (January 17).
In December, the average price of Tangshan secondary metallurgical coke was 2564 yuan / ton, a year-on-year increase of 14%, down 777 yuan / ton compared with the average price in November. The average price from January to December was 2890 yuan / ton, a year-on-year increase of 52.47% (or + 994 yuan / ton). In January 2022, the coke price rebounded significantly. As of January 17, the price of Tangshan secondary metallurgical coke was 3060 yuan / ton, an increase of 400 yuan / ton compared with the end of December.
Investment strategy: the coal mining sector (CITIC) increased by 44.67% in 2021. In December, there were many disturbance factors on the supply side, many coal mines were punished for over production and major accidents occurred in Xiaoyi coal mine, which attracted great attention of the central government and carried out special investigation. Then Shaanxi also announced to carry out special safety action; At the end of December, the introduction of Indonesia's export restriction policy periodically led to the rise of China's coal price. China's daily consumption remains at a high level, and the enthusiasm of power plants to purchase reserve warehouses is high, which also promotes coal prices. In the medium and long term, under the background of lack of planned investment, the constraints on the coal supply side are strong. Under the background of small annual growth in demand, coal will be a scarce resource in the next few years, and the stock capacity or high profits. The increase of the benchmark price of the annual long-term association also ensures the ability of the industry to maintain high profitability. Under the dual carbon goal, coal enterprises urgently need to transform, invest in energy Yankuang, Shenhua, Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) , Shanxi Meijin Energy Co.Ltd(000723) and others mainly focus on new energy operation and hydrogen energy. The coal industry has the advantages of strong cash flow and rich land resources in new energy operation, and has the ability and willingness. The transformation of new energy direction is conducive to improving the overall sector valuation level (at present, the PE valuation is 5-6 times), and the coal assets need to be repriced, Continue to be optimistic about the investment value of the sector. Thermal coal stocks are recommended to pay attention to: Shaanxi Coal Industry Company Limited(601225) (growth leader with excellent resource endowment, stable performance and high dividend); Yanzhou Coal Mining Company Limited(600188) (coal and coal chemical double wheel drive, elastic high score red standard); China Shenhua Energy Company Limited(601088) (Big Mac of coal enterprises, stable performance and high dividend); China Coal Energy Company Limited(601898) (coal production capacity is still expected to expand, and coal chemical business provides performance flexibility); Power investment and energy (high-quality coal and aluminum assets, large-scale layout and new energy operation); Beijing Haohua Energy Resource Co.Ltd(601101) (market-oriented pricing, very flexible performance). It is suggested to pay attention to metallurgical coal: Shanxi Lu'An Environmental Energydev.Co.Ltd(601699) (high proportion of coal in the market and high performance flexibility); Pingdingshan Tianan Coal Mining Co.Ltd(601666) (the coking coal leader in central and southern China with high dividend has a large space for staff reduction and efficiency increase); Shanxi Coking Coal Energy Group Co.Ltd(000983) (the leader of coking coal industry and the target of Shanxi state-owned enterprise reform); Huaibei Mining Holdings Co.Ltd(600985) (the underestimated value is the regional leader of coking coal, and many performance growth points such as coking coal, gravel aggregate and coal coking go hand in hand); Shanxi Coking Co.Ltd(600740) (holding 49% equity of China Coal Huajin, with great flexibility in coking coal asset performance); Jizhong Energy Resources Co.Ltd(000937) (market-oriented sales mechanism, leading regional coking coal with undervalued value). It is suggested to pay attention to anthracite: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) (coal chemical industry integration, future capacity increment can be expected, and coal price elasticity is large); Coke stocks are suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) (coke production capacity still increases, and the layout of hydrogen energy industry chain continues to expand); Jinneng Science&Technology Co.Ltd(603113) (for coke companies with strong profitability, Qingdao PDH new project will become the growth engine of the company); China Xuyang group (the leader in coke industry and the market share continues to increase); Kailuan Energy Chemical Co.Ltd(600997) (coal coke integrated tap with underestimated value);
Shaanxi Heimao Coking Co.Ltd(601015) (strong growth logic and simultaneous rise in volume and price).
Risk warning: excessive policy regulation; The economic growth rate is lower than expected; Renewable energy alternatives; Coal import impact risk.
