Last week, most of the country’s coal prices remained unchanged, and the thermal coal in Qinhuangdao rose slightly. The prices of anthracite-free lump coal and coking coal in some parts of the country increased significantly. Qinhuangdao stock fell to 6.43 million tons. The Datong-Qinhuangdao railway has completed the inspection and the inventory of power plants is relatively high. We believe that there is limited room for the further decline of Qingang stocks in the short term. Although there are thermal coal off-season, energy-saving emission reduction efforts, and the adverse effect of some bank reserve ratio increases, we believe that commodity inflation expectations are the main investment in the coal sector. As of October 11th, the 2010 PE of the coal sector was 17 times lower than the historical average of 20 times. It is still a good investment target.
Key points:
Qinhuangdao coal prices rose. On October 11th, Shanxi high-grade coal in Qinhuangdao rose by 0.7% to 720 yuan/ton before the holiday. The price of thermal coal pits in the southern suburbs of Datong increased by 0.7% from the pre-holiday level to 455 yuan/ton. In most parts of the country, thermal coal prices remained unchanged from the previous week.
Qingang stocks declined for three consecutive weeks. Affected by the inspection and repair of the Daqin Railway, Qinhuangdao's inventory decreased by 9.2% to 6.43 million tons on October 10. On October 4th, the Datong-Qinhuang Railway completed the 15-day overhaul, and Qinhuangdao Coal's volume regained its normal 600,000 tons per day. On the 8th of October, the number of days of inventory of direct power supply plants in the country was 21 days, which was higher than the 15 days of the same period in history. We expect that in the current off-season demand for thermal coal, there will be less willingness of power plants to purchase further coal, and there is limited room for further decline in Qinhuangdao's inventory in the short term.
The BDI freight index rose sharply. On October 8, the BDI index rose by 10% from pre-holiday. On September 29, the average domestic coastal coal freight index remained unchanged for two consecutive weeks.
Coal prices in Australia fell slightly and oil prices rose slightly. On October 8, the price of Australia's NEWC index fell slightly by 0.4% qoq to US$ 95.0/t; Brent crude oil ** settlement price rose by 6.3% since September 27 to US$ 84/barrel. For the same commodity, coal delivery is not as convenient as it was originally, so it has a closer connection with the real economy. Therefore, despite the depreciation of the U.S. dollar, commodity prices have risen, and international coal prices have not risen sharply yet.
1/3 coking coal prices rose. On October 9, steel prices rose by 1.4% compared with the pre-holiday period. On October 8, steel inventories rose for three consecutive weeks, accumulating a gain of 6.8%.
Anthracite lump prices rose sharply. On October 11, the smoke-free lump coal in most parts of the country rose sharply by more than 4%.
With regard to extremely cold weather, there is no conclusion yet. We believe that once it appears, it will benefit thermal coal companies and will not benefit coking coal companies.
The country plans to implement replacement electricity prices. After the increase in terminal electricity prices, the possibility of an increase in on-grid tariffs has also increased, which may be beneficial to the negotiation of contracted coal prices.
We believe that the main line of investment for coal stocks in the short term is inflation expectations. As of October 11th, coal stocks have a P/E ratio of 17 times in 2010, and the valuation is lower than the historical average of 20 times. Before the change in inflation expectations, we believe that the current coal sector is still a good investment target. Among them, we are more optimistic about the scarcity of resources, the price elasticity of coking coal and jet coal companies.
Key points:
Qinhuangdao coal prices rose. On October 11th, Shanxi high-grade coal in Qinhuangdao rose by 0.7% to 720 yuan/ton before the holiday. The price of thermal coal pits in the southern suburbs of Datong increased by 0.7% from the pre-holiday level to 455 yuan/ton. In most parts of the country, thermal coal prices remained unchanged from the previous week.
Qingang stocks declined for three consecutive weeks. Affected by the inspection and repair of the Daqin Railway, Qinhuangdao's inventory decreased by 9.2% to 6.43 million tons on October 10. On October 4th, the Datong-Qinhuang Railway completed the 15-day overhaul, and Qinhuangdao Coal's volume regained its normal 600,000 tons per day. On the 8th of October, the number of days of inventory of direct power supply plants in the country was 21 days, which was higher than the 15 days of the same period in history. We expect that in the current off-season demand for thermal coal, there will be less willingness of power plants to purchase further coal, and there is limited room for further decline in Qinhuangdao's inventory in the short term.
The BDI freight index rose sharply. On October 8, the BDI index rose by 10% from pre-holiday. On September 29, the average domestic coastal coal freight index remained unchanged for two consecutive weeks.
Coal prices in Australia fell slightly and oil prices rose slightly. On October 8, the price of Australia's NEWC index fell slightly by 0.4% qoq to US$ 95.0/t; Brent crude oil ** settlement price rose by 6.3% since September 27 to US$ 84/barrel. For the same commodity, coal delivery is not as convenient as it was originally, so it has a closer connection with the real economy. Therefore, despite the depreciation of the U.S. dollar, commodity prices have risen, and international coal prices have not risen sharply yet.
1/3 coking coal prices rose. On October 9, steel prices rose by 1.4% compared with the pre-holiday period. On October 8, steel inventories rose for three consecutive weeks, accumulating a gain of 6.8%.
Anthracite lump prices rose sharply. On October 11, the smoke-free lump coal in most parts of the country rose sharply by more than 4%.
With regard to extremely cold weather, there is no conclusion yet. We believe that once it appears, it will benefit thermal coal companies and will not benefit coking coal companies.
The country plans to implement replacement electricity prices. After the increase in terminal electricity prices, the possibility of an increase in on-grid tariffs has also increased, which may be beneficial to the negotiation of contracted coal prices.
We believe that the main line of investment for coal stocks in the short term is inflation expectations. As of October 11th, coal stocks have a P/E ratio of 17 times in 2010, and the valuation is lower than the historical average of 20 times. Before the change in inflation expectations, we believe that the current coal sector is still a good investment target. Among them, we are more optimistic about the scarcity of resources, the price elasticity of coking coal and jet coal companies.