The price of thermal coal and double coke continued to rebound, and the performance of Shanxi controlled coal industry exceeded expectations.
Thermal coal prices continued to rise this week, port coal prices exceeded 900 yuan. This week's fundamentals: on the demand side, the power plant operates at a high level of daily consumption, the demand for coal consumption is strong, and the storage of coal has declined, while superimposed the behavior of phased centralized replenishment on the eve of the Spring Festival, the overall demand for thermal coal is relatively strong; on the supply side, the production area is guaranteed to maintain high-load production and remain stable as a whole. In addition, under the influence of Indonesia's export restrictions, thermal coal imports are limited this week. On the whole, the current fundamentals of supply and demand at both ends of the resonance drive coal prices out of the rebound market. Judging in the later stage, we think that the current rebound trend may only be temporary, and coal prices may be under pressure gradually in the short term: on the demand side, the demand for coal consumption is about to weaken seasonally due to the decline in construction and the warmer weather in the lower reaches of the Spring Festival. At the same time, maintaining high inventory in power plants also weakens the demand for short-term replenishment. On the supply side, Indonesia announced this week that it would relax the ban on coal exports, releasing coal ships to leave port one after another, and import supply will resume, while large coal mines plan to maintain production and supply performance may be stable during the Spring Festival. However, we think that coal prices should not be excessively pessimistic. After the festival, the focus of the policy may again be to ensure safety. The current ultra-high load production intensity may not be sustainable, production intensity may match demand, and coal prices are expected to operate at a high level. In terms of coking coal, steel mills accelerated the resumption of production this week to greatly boost the demand for replenishment, and the fundamentals of coking coal changed from weak to strong, driving coking coal prices to strengthen. This week, some coal companies have issued performance forecasts, showing gratifying performance for the whole year, of which the performance of Shanxi controlled coal industry has greatly exceeded expectations by 456% compared with the same period last year, and the trend of high profits of coal enterprises has gradually emerged. Medium-and long-term outlook, with the improvement of the fundamental structure of the coal industry into a highly profitable era, the next 5-10 years will usher in a period of strategic opportunities for transformation, abundant cash flow is sufficient to support coal enterprises to layout new energy, new materials and other new track transformation, in line with the direction of dual-carbon policy. Among them, the short-term investment in the transformation of green power operators is low, the profit is cashed quickly, and the cash flow is relatively stable, which is the transformation choice of most coal enterprises. Among them, we recommend power investment energy, which has formed a new energy installation scale, and Yanzhou Mining Energy, which has a clear long-term green power transformation plan, and is optimistic about the transformation and growth potential of traditional energy enterprises. Steady performance and high dividend benefit targets: Yanzhou Mining Energy, China Shenhua, Shaanxi Coal Industry, Pingshan Coal shares; growth expected benefit targets: Shanxi Coking Coal, Jinjiang Coal, Panjiang shares, Huaibei Mining; new industry transformation targets: Huayang shares, Shan Coal International, Dian Investment Energy, Jinneng Technology, China Xuyang Group (H shares); debt restructuring benefit target: Yongtai Energy.
Coal and power industry chain: power coal prices continue to rise this week, Indonesia relaxes coal export ban
This week (January 10-January 14, 2022) thermal coal prices continued to rise, Q5500 thermal coal spot price rose to 945 yuan / ton. From the fundamental point of view of this week, on the demand side, the low temperature weather continues to support the high operation of the daily consumption level of the power plant, and the performance of coal consumption demand is strong, which also leads to a decline in coal storage in the power plant, while superimposing the behavior of phased centralized replenishment on the eve of the Spring Festival, the overall demand for thermal coal is relatively strong; on the supply side, the production of the producing area is guaranteed to maintain high-load production and remains stable as a whole, and some coal mines have reduced production due to the approach of the Spring Festival, but the impact is small. In addition, under the influence of Indonesia's export restrictions, thermal coal imports are limited this week, but this week Indonesia announced the relaxation of export ban, import supply will resume later. On the whole, the current fundamentals of supply and demand at both ends of the resonance drive coal prices out of the rebound market.
Coal and coke steel industry chain: Shuangjiao continues its rising trend this week, and the pace of resuming production by steel enterprises accelerates to boost demand.
Coke: the price of coke will be raised by 200 yuan again this week. On the demand side, the pace of resuming production of steel mills has been accelerated, the operating rate of Tangshan blast furnace has increased significantly, and the concentrated replenishment of steel mills has led to a stronger demand for coke; on the supply side, the high demand has led to an increase in the operating rate of coke enterprises, but due to the impact of production restrictions on environmental protection, the resumption rhythm of coke enterprises is weaker than that of steel mills, and the fundamentals of coke have changed from weak to strong, supporting higher coke prices. In terms of coking coal: coking coal prices ushered in a general rise this week, mainly due to the accelerated resumption of blast furnace production in steel mills to boost the downstream replenishment demand of coking steel. Downstream coking coal stocks have been pulled up in a straight line within two weeks after the year, while the production release has been limited as a result of continuous security checks in the area of origin. The fundamentals of coking coal ushered in a phased inflection point, gradually turning to a tight balance, driving the rise in coking coal prices.
Risk hints: the downside risk of economic growth, the risk of mismatch between supply and demand, and the risk of accelerated substitution of renewable energy.
