Coal prices were mixed this week. As of December 15, the pit price of Shaanxi Yulin power lump coal (Q6000) was 9550 yuan ton, week-on-week **100 yuan ton;Inner Mongolia Dongsheng large block of refined coal plate price (Q5500) 7740 yuan ton, flat week-on-week;The price of the sticky coal pit in the southern suburbs of Datong (tax included) (Q5500) 8000 yuan ton, week-on-week **130 yuan ton;
The daily consumption of thermal coal increased month-on-month. As of December 15, 5,040 cars arrived on the Qinhuangdao Port Railway this week, down 17 percent week-on-week24%；Qinhuangdao port throughput 2060,000 tons, down 62 week-on-week61%。The average weekly inventory of important domestic ports (Qinhuangdao, Caofeidian, SDIC Jingtang Port) is 152940,000 tons, compared to 1,385 last week710,000 tons**14370,000 tons, an increase of 10 week-on-week37%。As of December 14, the coal inventory of 17 inland provinces was 9142300,000 tons, down 200 from last week300,000 tons, down 214%；The daily consumption is 427900,000 tons, up 54300,000 tons per day, an increase of 14 week-on-week53%；The number of available days is 214 days, down 360 days. 
International thermal coal** was mixed. As of December 15, the market price of thermal coal (Q5500) in Shanxi of Qinhuangdao Port was 9460 yuan ton, week**150 yuan ton;As of December 14, Newcastle NEWC5500 kcal thermal coal FOB spot **94$6 ton, week-on-week**0$5 ton;The spot price of ARA6000 kcal thermal coal is 116$5 ton, week-on-week **9$0 t;The spot price of Richards Port thermal coal FOB is 87$3 ton, week-on-week **6$5 ton;
In terms of coke: extreme weather affected transportation, and the three rounds of coke price increases were fully implemented. According to the coal resource network, as of December 12, Fenwei Luliang quasi-first-class coke was 2,310 yuan, and the daily ratio was 100 yuanRizhao quasi-first-class coke is 2430 yuan ton, and the daily ratio is 30 yuan ton. The three rounds of coke price increases have been fully implemented, with a cumulative increase of 300-330 yuan tons. Due to the closure of some high-speed sections due to the rain and snow weather in the main producing areas, the efficiency of coke transportation has declined, and the steel mills are more enthusiastic about raw material procurement considering that their inventories are low and there is still snowfall in the later period. Coke enterprises are still suppressed by the cost of raw coal and the enthusiasm for increasing production is not high, the output of coke at the end is still low, and coke enterprises maintain low inventory operation under the active procurement of downstream, and the short-term supply and demand continue to be tight.
In terms of coking coal: the sentiment of online auctions has fallen, and coal mines have stabilized temporarily. According to the coal resource network, as of December 15, the CCI Shanxi low sulfur index was 2,568 yuan tons, and the daily ratio was 8 yuan tonsThe CCI Shanxi medium sulfur index was 2340 yuan tons, flat on a daily basis;The CCI Shanxi high sulfur index was 2323 yuan tons, flat on a daily basis;CCI Lingshi Fertile Coal Index was 2350 yuan tons, flat on a daily basis;The CCI Jining gas and coal index was 1530 yuan tons, flat on a daily basis. Coal mine accidents continue to occur, coupled with the coal mine taking the initiative to control production in consideration of factors such as safety production and the completion of annual output tasks, the first end will continue to be tight in the short term. In addition, heavy snowfall in the main producing areas has seriously hindered transportation, and some mining sites have accumulated storage, resulting in suspension and reduction of production. In terms of steel products in recent days, the market sentiment of raw materials has fallen, and the online auction performance of coking coal is not good, but considering the impact of weather and other factors, the current coal mine pit mouth is still mostly stable
We believe that we are currently in the early stage of a new round of upward cycle of the coal economy, and the fundamentals and policies are resonant. On December 13, 2023, an accident occurred in the Shaqu No. 1 Coal Mine of Huajin Coking Coal Co., Ltd., a subsidiary of Shanxi Coking Coal Group, while cleaning coal bunkers, resulting in one injury and three deaths. At the same time, Shanxi, Henan, Qinghai and other provinces and cities once again emphasized the work of coal mine safety supervision, arranged and deployed the special investigation and rectification of potential safety hazards in the coal mine field, resolutely prevented and curbed the occurrence of accidents, and continued to maintain a high-pressure situation in coal mine safety supervision.
On the demand side, this week, with the cooling of the new ** range, the daily consumption of coal for coal power continued to rise (as of December 14, the daily consumption of coal in 17 inland provinces was 427900,000 tons, up 54300,000 tons per day, an increase of 14 week-on-week53%；The daily coal consumption of the eight coastal provinces is 222500,000 tons, up 15 from last week700,000 tons per day, an increase of 7 week-on-week59%）。Non-electricity demand, especially chemical coal consumption, is still strong (as of December 15, the weekly coal consumption of chemical industry was 603180,000 tons, down 185pct), a slight decrease week-on-week, but the overall remains relatively high. We expect that the overall coal market is expected to stabilize and operate strongly under the background of coal supply contraction due to continuous safety and strong supervision in the main producing areas near the end of the year and the beginning of the year, coinciding with the peak winter when the overall demand for coal remains high, and the overall demand for replenishment under the overall low inventory of coking coal.
On the other hand, the demand for coking coal remains stable in the context of a slight increase in domestic crude steel production, which further highlights the scarcity of coking coal, especially high-quality main coking coal. At the same time, the high dividends and high dividends of some coking coal companies are expected to promote the value recovery of the coking coal sector and there is a large space. Overall, in the context of energy inflation, we believe that the pattern of tight coal supply and demand in the next 3-5 years has not changed, and high-quality coal companies still have the attributes of high barriers, high cash, high dividends and high dividends. 
Investment suggestions: Combined with our research and judgment on the energy capacity cycle, it can be considered that under the situation of increasing coal production and ensuring supply in the country, the tight and tightening situation of coal supply may continue throughout the "14th Five-Year Plan" and even the "15th Five-Year Plan", or a number of high-quality production capacity needs to be newly planned and built to ensure China's medium and long-term energy coal demand.
In the context of the accelerated westward shift of coal layout and the significant increase in resource fees and investment per ton of coal, the rise in the rigid cost of economic development is expected to support the coal center to remain high. At present, the coal sector has the attributes of high performance, high cash and high dividends, superimposed with the characteristics of high prosperity, long cycle and high barriers in the industry, as well as low valuation levels and inverted primary and secondary valuations, and the coal sector has both offensive and defensive investment. We continue to be bullish on the coal sector across the board and continue to recommend focusing on historical allocation opportunities in coal.
Bottom-up focus: first, Yankuang Energy, Guanghui Energy, Shaanxi Coal, Shanmei International, Jinkong Coal Industry, etc., which have large endogenous and epitaxial growth space and excellent resource endowmentSecond, under the promotion of the central reform policy, the central coal enterprises with large room for revaluation and improvement of asset value, China Shenhua, China Coal Energy, Xinji Energy, etc.;The third is the world's special scarce high-quality metallurgical coal companies Pingmei Co., Ltd., Huaibei Mining Co., Ltd., Shanxi Coking Coal, Lu'an Huaneng, Panjiang Co., Ltd., etc.;Fourth, it is recommended to pay attention to the anthracite-related targets that can be used as metallurgical injection coal, such as Orchid Science and Technology and Huayang Co., Ltd., as well as related opportunities in the field of coal production and construction under the new round of capacity cycle, such as Tiandi Technology and Tianma Intelligent Control.
This is an abridged excerpt from the report, the original PDF of the report
Fossil energy-coal mining: the third round of coke increase has been fully implemented, and it is recommended to continue to pay attention to coking coal allocation opportunities-Cinda**[Zuo Qianming, Li Chunchi]-20231217[Page 30]".
Report**: Value Catalog