The Zhitong Finance App learned that Shanxi Securities released a research report saying that the increase in coal supply in the fourth quarter was limited, seasonal hydropower and new energy output declined, and overall coal supply and demand are expected to maintain a relative balance under the game. At the same time, the price difference between imported coal and domestic supply is not significant, compounded by the increase in overseas energy demand in winter, and the impact or weakening of imported coal. Supply growth is limited, demand is still expected, and it is expected that there is limited room for coal prices to fall in winter. Multiple departments have introduced favorable policies, and the entry of incremental capital into the market is expected to raise the industry's investment risk appetite. The focus is on stable high-dividend varieties, low net market ratio targets, and flexible metallurgical coal stocks.

The main views of Shanxi Securities are as follows:

Data disassembly

Volume and price: Import volume increased year-on-year from January to September 2024, and increased year-on-month in September. The cumulative import volume of coal and lignite increased 12% year on year from January to September; in September, the single month increased by 12.93% year on year, up 3.82% month on month. The import price of full-caliber coal fell in January-September compared to the same period last year, but remained relatively high; prices fell month-on-month in September. From January to September 2024, the average import price of full-caliber coal was recorded at 99 US dollars/ton, down 11.34% from last year's average price. The price of imported coal recorded 91 US dollars/ton in September, down 3.53% year on year and 4.31% month on month.

Among them: In terms of thermal coal, imports increased year-on-year in January-September, and prices fell year-on-year; in September, imports increased month-on-month, and the year-on-year decline in prices remained flat month-on-month. In terms of coking coal, imports increased year on year in January-September, and prices fell year on year; in September, imports fell year on month, and price growth fell month on month. In terms of lignite, imports increased year-on-year in January-September, and import prices fell year-on-year; in September, imports increased month-on-month, and prices declined month-on-month. In terms of anthracite, imports declined year on year in January-September, and import prices fell year on year; in September, import growth fell month-on-month, and prices fell month-on-month.

The overall coal import data for January-September '24 was in line with expectations. There was a month-on-month increase in September, and the performance was divided by coal type

In terms of total imports, the growth rate of coal imports since 2024 has declined significantly compared to 2023, which is in line with expectations. In terms of the import structure, the structure of imported coal types basically continues the pattern of 2023. Among them, the share of coking coal has increased, the share of anthracite has declined, and thermal coal and lignite have basically returned to the level of 2019 and 2020.

In September, with the exception of coking coal, thermal coal, lignite, and anthracite all achieved year-on-year growth, mainly due to the weakening impact of domestic thermal power generation being squeezed out by hydropower, a clear recovery in thermal power, and an increase in demand for storage; as real estate demand still needs to recover, coking coal imports were under pressure in the short term. In terms of import prices, coal import prices remained relatively high, falling 4.31% month-on-month in September; by type of coal, all coal prices except thermal coal fell month-on-month. Combined with volume and price data, domestic coal supply has continued to contract structurally since 2024. Domestic coal supply rebounded slightly in September, compounded by coastal capacity, and the overall high volume and price of imported coal continued to fall.

Domestic supply has recovered, and the policy basis for “restricting imports of coal” has been strengthened. Coal production in Shanxi showed a marginal recovery trend in the past two months, and the domestic supply gap continued to narrow. On the premise that demand expectations remain unchanged, the conditions relating to the introduction of a policy to restrict the import of coal will be strengthened.

Aspect of the target

Stable high-dividend varieties: Central Bank SFISF is more favorable to collateral prices. At the same time, high-dividend varieties can hedge leveraged capital costs to a certain extent, and there is room for arbitrage, so they are relatively more optimistic about stable high-dividend coal components in the Shanghai and Shenzhen 300 China Shenhua (601088.SH), Shaanxi Coal (601225.SH), Yankuang Energy (600188.SH), China Coal Energy (), etc. 601898.SH In terms of low net market ratios, combined with relevant policies such as “increase holdings loans,” “repurchase loans,” and “breaking net restrictions,” it is possible to recover valuations with low net market ratios or broken net targets such as Orchid Science and Technology (600123.SH), Gansu Energy (600308.SH), and Shanghai Energy (600508.SH).

Metallurgical coal: Financial and real estate-related policies are expected to boost downstream demand expectations for coking coal. Currently, metallurgical coal prices are expected to rise, and flexible metallurgical coal stocks such as Lu'an Huanneng (601699.SH), Pingmei Co., Ltd. (601666.SH), Huaibei Mining (600985.SH), and Shanmei International () are expected to benefit. 600546.SH

Risk warning

The interest rate environment has changed drastically, domestic demand has fallen short of expectations, domestic supply has increased markedly, Mongolia's imports have increased dramatically, Australia's imports of coking coal have increased dramatically, Russia's eastward transportation bottleneck has been broken, Indonesian coal exports to China have been drastically reduced, and international coal prices have dropped sharply.