We expect that with the arrival of the off-season in the fall, thermal coal spot prices will continue to fall further in the short-term, but there will not be much room for decline.
We expect that with the arrival of the off-season in the fall, thermal coal spot prices will continue to fall further in the short-term, but there will not be much room for decline.
The above judgment is mainly due to: 1. This year's summer coal prices did not appear similar to the previous year's seasonal rise, so there is little room for falling; 2.8 months is usually the month with the highest hydropower output, after which the proportion of thermal power generation will gradually increase due to the decline of incoming water; 3. At present, the inventory of key power companies has decreased as compared with the previous coal season; 4. In recent weeks, the domestic coal shipping price has rebounded, especially in the last two weeks, and has seen a large increase; 5. In the near future, under the pressure of energy conservation and consumption reduction, the production and power restriction of backward production capacity will exert pressure on coal prices, but the impact of such mandatory measures is expected to be short-term and temporary.
In addition, we believe that although coking coal prices have some pressure in the short term, they are still optimistic about the long term. In the short term, the reduction in international coking coal prices will have a certain impact on domestic prices; as one of the major energy-consuming industries, iron and steel enterprises are affected by the recent implementation of energy-saving emission reduction policies, and output is expected to decline, lowering the Coking coal demand. However, in the long run, the de-stocking cycle of the steel industry will be shortened as the industry restricts production and the elimination of outdated production capacity increases, resulting in an earlier arrival of the restocking cycle, which in turn will increase the demand for coking coal. In addition, coking coal as a scarce resource, its long-term price is expected to maintain its upward trend.
ã€Investment Advice】
From a long-term perspective, we believe that if the trend of coal prices declines is not in line with national interests, it is not conducive to energy-saving emission reduction, and is not conducive to China's energy security. We maintain our "buy" rating on the coal industry. In terms of individual stocks, we recommend that investors pay attention to the unique and high-growth Haohua Energy, which benefits from the tight supply of coal in the Bohai Rim region and open-pit coal and Hepingzhuang energy with large assets injected into the space.
We expect that with the arrival of the off-season in the fall, thermal coal spot prices will continue to fall further in the short-term, but there will not be much room for decline.
The above judgment is mainly due to: 1. This year's summer coal prices did not appear similar to the previous year's seasonal rise, so there is little room for falling; 2.8 months is usually the month with the highest hydropower output, after which the proportion of thermal power generation will gradually increase due to the decline of incoming water; 3. At present, the inventory of key power companies has decreased as compared with the previous coal season; 4. In recent weeks, the domestic coal shipping price has rebounded, especially in the last two weeks, and has seen a large increase; 5. In the near future, under the pressure of energy conservation and consumption reduction, the production and power restriction of backward production capacity will exert pressure on coal prices, but the impact of such mandatory measures is expected to be short-term and temporary.
In addition, we believe that although coking coal prices have some pressure in the short term, they are still optimistic about the long term. In the short term, the reduction in international coking coal prices will have a certain impact on domestic prices; as one of the major energy-consuming industries, iron and steel enterprises are affected by the recent implementation of energy-saving emission reduction policies, and output is expected to decline, lowering the Coking coal demand. However, in the long run, the de-stocking cycle of the steel industry will be shortened as the industry restricts production and the elimination of outdated production capacity increases, resulting in an earlier arrival of the restocking cycle, which in turn will increase the demand for coking coal. In addition, coking coal as a scarce resource, its long-term price is expected to maintain its upward trend.
ã€Investment Advice】
From a long-term perspective, we believe that if the trend of coal prices declines is not in line with national interests, it is not conducive to energy-saving emission reduction, and is not conducive to China's energy security. We maintain our "buy" rating on the coal industry. In terms of individual stocks, we recommend that investors pay attention to the unique and high-growth Haohua Energy, which benefits from the tight supply of coal in the Bohai Rim region and open-pit coal and Hepingzhuang energy with large assets injected into the space.
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