The Zhitong Finance App learned that Anxin International released a research report indicating that as we enter the low season, thermal coal prices have weakened, but there have been signs of stabilization in the past two days. Overall port inventories are low. Coupled with a sharp drop in coal production in Q1 this year, it is expected that coal imports may decrease in April, so it is not ruled out that coal prices will rebound slightly before summer begins. Looking at the medium to long term, we are still optimistic about coal companies' high dividend performance at relatively high coal prices this year. It is recommended to focus on Yancoal Australia (03668), Yankuang Energy (01171), China Shenhua (01088), and Shougang Resources (00639).
Anxin International's main views are as follows:
Overseas coal prices have stabilized, and India's electricity demand has increased
Last week, the port of Newcastle in Australia stabilized at $128 per ton for 6,000 kcal, up 1 US dollar/ton from the beginning of April. The FOB price of Port Richard thermal coal in South Africa was 103 US dollars/ton, up 2 US dollars/ton from the beginning of April. The price of CFRQ3800 in Indonesia was 56 US dollars/ton, a slight decrease of 2 US dollars/ton from the beginning of April. The FOB price of thermal coal from the three European ports was 119 US dollars/ton, down 7 US dollars/ton from the beginning of April. Overseas coal prices are generally stable. International LNG prices all rose slightly from last week, and China's CIF reached 9.95 US dollars/million British baht. India's hydropower generation fell 16.3% year over year in Q1, reservoir water levels remained low, and it is expected that dependence on coal power may increase as the summer heatwave gradually approaches.
The Baltimore accident affected US exports, and Australian coal exports increased month-on-month
On April 9, the US Energy Information Administration (EIA) lowered the US coal export forecast for April and May by 33% and 20%, respectively. The annual export volume was lowered to 94.5 million short tons, a year-on-year decrease of 5.31% due to the port closure due to the collapse of the Baltimore bridge. The Port of Baltimore accounted for 28% of US exports last year. According to Kpler Ships, Australia's coal exports in March were 298.67 million tons, up 4.75% from month to month, up 1.37% year on year, of which 6.445 million tons were exported to mainland China, up 13.98% month on month.
Entering the low season, domestic thermal coal prices are under pressure, but the decline seems to have abated. The liquidation price of Q5500 thermal coal in Qinhuangdao is 820 yuan/ton, the same as a week ago; the liquidation price of Q5500 thermal coal in Guangzhou Port is 905 yuan/ton, down 5 yuan/ton from a week ago; the comprehensive average price of 5,500K thermal coal in the Bohai Rim is 712 yuan/ton, down 2 yuan/ton from a week ago. According to iFind, the average daily coal consumption of the six major power generation groups is 730,000 tons, which is the same as last week.
Raw coal production declined in January-February. Production in Shanxi was cut a lot, and port inventories were not high
Raw coal production in January-February was 705 million tons, down 4.2% year on year. This is also the first time in two years that production has declined year on year. Furthermore, due to Shanxi's previous “inspection and three super” policies, production is expected to be cut by 78 million tons this year. However, on April 5, the General Office of Shanxi Province issued the “2024 Work Plan to Stabilize Coal Production and Supply in Shanxi Province”, and subsequent production cuts are expected to shrink compared to Q1. Also, looking at the port inventory of Beifang Port of 22.67 million tons, a decrease from 23.71 million tons at the end of March, the port inventory is not high.
Risk warning: macroeconomic recovery falls short of expectations, demand falls short of expectations, coal mine accidents, international geopolitical crisis.