Everbright Securitiesresearch reportpointed out, according toResearch, the long-term agreement price of coking coal in Shanxi large mines and mainstream large mines in Pingdingshan, Henan will rise in the first quarter of 2024. From January to November 2023, domestic coking coal production was 450 million tons, -0.1% year-on-year, and coking raw coal production was 1.22 billion tons, +1.3% year-on-year. The growth rates were both lower than the growth rate of raw coal production (+3.5%). According to forecasts, a total of 503 million tons of new coal production capacity will be added nationwide from 2023 to 2027, of which only 88 million tons will be coking coal production capacity.Facing 2024, it is expected thatchina steelThe industry is expected to continue to be marginally profitable, and pig iron’s cost advantage over scrap steel will continue to be maintained, while crude steel output is expected to remain flat. Therefore, the growth rate of pig iron output will continue to exceed that of crude steel, achieving positive growth, thereby supporting the demand for coking coal.
The full text is as follows
[Coal]The price of coking coal in the long-term agreement will be raised in Q1 2024, and we continue to be optimistic about the allocation value of the coking coal sector.
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According to Mysteel research, the long-term coking coal price of Shanxi Big Mine will increase in the first quarter of 2024, of which low-sulfur main coking coal will increase by 200 yuan/ton (+10%), and low-sulfur fertilizer coal will increase by 200 yuan/ton (+10%), 1/ 3 Coking coal increased by 200 yuan/ton (+11%), lean coal increased by 100 yuan/ton (+8%), and gas coal increased by 100 yuan/ton (+9%); coking coal in the first quarter of 2024 for mainstream large mines in Pingdingshan, Henan The price of Changxie has increased, with main coking coal rising by 200 yuan/ton (+9%), and 1/3 coking coal rising by 150 yuan/ton (+8%) in 2020 yuan/ton.
After the long-term coking coal price increase, the spot price is still at a premium compared to the long-term coking coal price.
According to Mysteel statistics, on January 2, 2024, the ex-factory price of Shanxi Luliang low-sulfur main coking coal was 2,500 yuan/ton. In the first quarter of 2024, the long-term contract price of Shanxi Dakui low-sulfur main coking coal was 2,210 yuan/ton. The spot price is 2,210 yuan/ton. A 13% premium; the ex-factory price of 1/3 coking coal in Linfen, Shanxi is 2,300 yuan/ton, and the long-term contract price of 1/3 coking coal in Shanxi Big Mine in the first quarter of 2024 is 2,035 yuan/ton. The spot long-term contract price also has a 13% premium.
Resource endowment and safety accidents limit the release of coking coal production capacity
From January to November 2023, domestic coking coal production was 450 million tons, -0.1% year-on-year, and coking raw coal production was 1.22 billion tons, +1.3% year-on-year. The growth rates were both lower than the growth rate of raw coal production (+3.5%). According to Fenwei It is predicted that the country’s new coal production capacity will total 503 million tons from 2023 to 2027, of which only 88 million tons will be coking coal production capacity; (2) According to incomplete statistics from the Coal Safety Network, in the first 11 months of 2023, a cumulative number of coal mine accidents occurred in Shanxi 35 cases, with a cumulative death toll of 67, significantly higher than the same period in 2022 (55) and 2021 (13). Shanxi’s coking coal production in 2022 will be 710 million tons, accounting for 54% of the country’s coking coal production.
Pig iron production is expected to grow positively in 2024, supporting high and strong demand for coking coal
(1) Coking coal is almost entirely used in ironmaking. China’s pig iron production will account for 66% of the world’s total in 2022. China’s pig iron production growth rates from January to November 2022 and 2023 will be -0.8% and +1.9% respectively. The growth rate has It has exceeded the growth rate of crude steel production for two consecutive years. This is mainly due to the fact that in the context of meager profits in the steel industry, steel mills pay more attention to reducing costs and increasing efficiency, and use relatively low-cost pig iron instead of scrap steel; (2) Facing 2024, We expect that China’s steel industry is expected to continue to be marginally profitable, and the cost advantage of pig iron over scrap steel will continue to be maintained, while crude steel production is expected to remain flat. Therefore, the growth rate of pig iron production will continue to exceed that of crude steel, achieving positive growth, thereby supporting the demand for coking coal.
Coal import tariffs will be restored in 2024, and my country’s coking coal imports may decrease
(1) According to the “People’s Republic of Chinaimport and exportTariff (2024)”, coal import tariffs will be restored from January 1, 2024; (2) From January to November 2023, my country imported 90.73 million tons of coking coal, involving 85.13 million tons of tariff adjustments (accounting for the total coking coal imports 94%, accounting for 18.8% of domestic production), this part of coking coal will increase the import tariff by 3%; (3) The last time my country canceled the tentative tax rate of zero import tariff was in October 2014, and in 2015, my country’s coking coal imports Volume dropped 24% month-on-month.
Risk Analysis:The economy is stalling and declining; hydropower output has exceeded expectations; overseas coal prices have fallen sharply; and the production capacity of mines under construction has exceeded expectations.
(Source of article: China Business News)
2024-01-04 00:27:36
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