Downstream procurement is active and prices are rising. As of January 21, the pithead price of Shaanxi Yulin power lump coal (q6000) was 1130.0 yuan / ton, up 50.0 yuan / ton on a weekly basis and 510 yuan / ton on a year-on-year basis; The pit mouth price of sticky coal (including tax) (q5500) in the southern suburb of Datong was 815.0 yuan / ton, up 39.0 yuan / ton on a weekly basis and 105 yuan / ton on a year-on-year basis; Inner Mongolia Dongsheng large clean coal truck sector price (q5500) was 928.0 yuan / ton, up 31.0 yuan / ton week on week, up 373 yuan / ton compared with the same period last year. The downstream demand is good, the power plants in some guaranteed supply areas are actively replenishing storage, the demand of users such as chemical industry and coking continues, the sales of coal mines are good, and the prices are rising.
Port inventory fell, and there was a shortage of tradable goods. This week, there were 5974 arrival trains of Qinhuangdao Port Railway, an increase of 1026 compared with last week, and the weekly ring ratio increased by 20.74%; Qinhuangdao Port handled 484000 tons, an increase of 34000 tons compared with last week, and the weekly ring ratio increased by 7.56%. As of January 21, the inventory of the four major ports around the Bohai Sea (Qinhuangdao port, Huanghua port, Caofeidian port and east port of Jingtang Port) was 8.34 million tons (down 2.61 million tons), the number of anchor ships was 78.0 (down 42.00), and the cargo ship ratio (inventory to ship ratio) was 10.7 (up 1.59).
The deterioration of the international epidemic has disturbed supply, and coal prices at ports outside China have risen simultaneously. As of January 20, the coal inventory of the eight coastal provinces was 32.441 million tons, down 460000 tons from last week and 1.40% from the week on week; The daily consumption was 2.09 million tons, a decrease of 157000 tons / day compared with last week, and a decrease of 6.99% on a weekly basis; The available days were 15.5 days, up 0.90 days from last week. As of January 21, the market price of Qinhuangdao port thermal coal (q5500) produced in Shanxi was 1000.0 yuan / ton, up 55.0 yuan / ton on a weekly basis. International coal price: as of January 20, the spot price of power coal in Newcastle port was US $227.2/t, up US $10.57/t on a weekly basis. As of January 21, the active contract of thermal coal futures increased by 74.8 yuan / ton to 767.2 yuan / ton compared with the same period last week, and the futures discount was 232.8 yuan / ton. Recently, the national standing committee meeting called for the compaction of energy supply, the territorial responsibility of local governments and the main responsibility of enterprises, and the normal production of coal. It is expected that large coal enterprises and state-owned enterprises will continue to maintain normal production during the Spring Festival, but small and medium-sized coal mines will gradually stop production and have holidays, and the supply margin will be tightened. As the Spring Festival approaches, the demand for coal consumption in the downstream falls, and the phased replenishment of storage at the terminal will gradually end. It is expected that the Chinese market will gradually enter the state of weak supply and demand, and the coal price will gradually stabilize.
Coke: the short-term coke price is mainly stable. As of January 21, 2022, Fenwei CCI Luliang quasi primary metallurgical coke reported 2960 yuan / ton, unchanged on a week-on-week basis, with a year-on-year increase of 410 yuan / ton. Port index: port index: CCI Rizhao quasi first-class metallurgical coke reported 3150 yuan / ton, unchanged on a week-on-week basis, with a year-on-year increase of 220 yuan / ton. The production restriction policy of the Winter Olympic Games is gradually increased, and the production restriction expectation at both ends of coke supply and demand is continuously strengthened. In the later stage, there may be a weak pattern of supply and demand. Under the influence of the current large-scale rain and snow weather in the north, the short-term coke price may remain stable.
Coking coal: the short-term price rise slows down, and the medium and long-term scarcity is expected to gradually highlight. As of January 20, CCI Shanxi low sulfur index was 2755 yuan / ton, unchanged on a weekly basis, with a month on month increase of 450 yuan / ton and a year-on-year increase of 1215 yuan / ton; CCI Shanxi high sulfur index was 2323 yuan / ton, up 150 yuan / ton on a weekly basis and 443 yuan / ton on a monthly basis, up 1168 yuan / ton on a year-on-year basis; Lingshi fat coal index was 2350 yuan / ton, up 100 yuan / ton on a weekly basis and 450 yuan / ton on a monthly basis, up 1250 yuan / ton on a year-on-year basis; Puxian 1 / 3 coke index was 2300 yuan / ton, unchanged on a weekly basis, with a month on month increase of 400 yuan / ton and a year-on-year increase of 1100 yuan / ton. Near the Spring Festival, small and medium-sized coal mines have gradually increased production and holidays, and the supply is limited to a certain extent. In addition, the downstream construction is improved and the transportation is active. The coking coal inventory in the producing area continues to decline and the price rises; However, as the inventory of coking coal at the end of coke enterprises and steel enterprises has increased to a high level, the strength of replenishment may decline, and the rise of short-term coking coal price will also slow down. In the medium and long term, the newly-built coking coal mines are insufficient, the depletion of resources is becoming more and more prominent, and the supply side will shrink significantly, supporting that the price of 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 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. With the adjustment of industrial structure and the rapid growth of residents’ domestic energy consumption, the demand for energy in current social development is becoming more and more rigid, rather than the limited output of fossil energy, and the demand for coal is expected to gradually increase with economic growth; At present, the new capital expenditure on the coal supply side is weak, and the depletion of resources in old mining areas is accelerating. Considering the decline of coal enterprises’ willingness and ability to build mines and the construction cycle of more than 5 years, the coal supply may be difficult to respond to the demand growth during the 14th Five Year Plan period, and the price will remain high. Under the general cost reduction, efficiency increase and endogenous extension growth of the industry, the enterprise profit is expected to rise. At the same time, the coal related policies tend to be loose. On November 17, the national standing committee decided to establish 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 resources / 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 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 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) , which is 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; The macro economy has fallen sharply.
