Li Rongqiang: Supply tightens moderately to increase coal prices

"Cold winter" approached, coal prices firming Shanji International Secretary General Li Rongqiang said that the moderate tightening of domestic coal supply is the main reason for the rise in coal prices. Recently, some media reported that the Qinhuangdao port coal price rose by 7% in a single month. On the 25th, Wang Siqiang, deputy director general of the National Energy Administration, said at the press conference on the energy economic situation in the third quarter that coal supply and demand were basically balanced in the fourth quarter, but The possibility of tight coal supplies still exists.

In the secondary market, affected by the news of the "millennium winter," the enthusiasm for the rise of coal stocks was also released. After rising continuously, on the 25th, the Yanzhou Coal Mine (600188) hit a new record high and closed at a daily limit. Active stocks include China Coal Energy (601898) and Shan Coal International (600546). Among them, Shan Coal International also surged to a record high of 40.50 yuan on the 25th. Yesterday, affected by the turbulence in the A-share market, coal stocks also suffered a slight decline due to the broader market decline.

As a coal-producing province in Shanxi, its coal production, transportation, and sales account for about 70% of the country's externally adjusted commercial coal. Therefore, Shanxi's coal production will affect the entire winter heating problem. With the advancement of merger and reorganization of coal mining enterprises in Shanxi Province, coal production is increasing quarter by month. According to statistics, from January to September 2010, raw coal production in Shanxi Province has completed a total of 522.29 million tons, an increase of 90.94 million tons, an increase of 21.08%.

“Shanxi’s coal production has increased by 21.08% this year, but there is still a tight supply situation,” said Li Rongqiang, the international coalition secretary of Shan Coal, in an interview with the “Securities Daily” reporter.

In addition, Li Rongqiang also analyzed the situation of the entire market. Li Rongqiang told reporters: “Last year, due to the integration of Shanxi coal mines, Shanxi’s coal output has dropped significantly. From a national perspective, Shanxi has changed from a coal-producing province to a second-largest coal-producing province, while Inner Mongolia’s coal production ranks No. 1. From the supply side, this year the entire coal supply market appears a moderate tightening situation, the demand for pits is very strong, and the supply and demand of the market has become tense. In Shanxi, there has been a phenomenon of taking money to buy coal, This is also the main reason for the rise of coal."

Coal is originally a seasonal product, and in the face of the coming cold winter, the supply of coal is also becoming increasingly prominent. This year, the northern thermal power plant started buying coal from September, a full month earlier than in previous years. The power plants in all regions, especially the Southern Power Plant, have been involved in the prevention of winter snowstorms affecting coal transportation, entering early winter coal storage and increasing coal purchases. Li Rongqiang said that compared to previous years, this year's coal market did not see large-scale sales during the summer, and there was a tight supply in September. Therefore, the price increase this year was earlier than in previous years, and from the price increase situation. From a perspective, the increase was stronger than before. Among them, after the National Day this year, Inner Mongolia’s coal price rose by 50-60 yuan per ton. This has also caused coal producers to start prices.

As a coal listed company in Shanxi, Shan Coal International has also become the focus of investors.

Recently, the company has also issued 23.5 million shares, with stocks of at least 23.06 yuan per share, of which 5.5 billion yuan was raised to finance the acquisition of some coal mines and Taihang Shipping assets. The acquisition will increase the company's coal capacity by 8.7 million tons, which is 1.3 times the existing capacity. It is expected that the integrated coal mine will be put into operation in late 2011, and it will be fully operational in 2012.

According to the planning of the Shanxi Provincial Government and the situation approved so far, Shanmei Coal Group will have 32 mines with a combined capacity of 33.8 million tons. According to the Group's development plan, 30-50 million tons of coal will be produced in the next 3-5 years and gradually injected into listed companies. The company's capacity expansion space is full of imagination for investors.

In addition, there are problems in the coal industry such as production capacity and capacity. Therefore, some coal companies will face transformation. In today's transitional period of “Channel is King”, Shan Coal International proposed a forward-looking development plan. The company implemented the “Coal Mine → Railway → Port → Ocean Shipping → Coal Distribution Center → User” coal supply chain architecture, making the company There is an exclusive advantage in pits, transportation, ports, etc. Therefore, Shanxi Coal International’s performance this year has also increased a lot.

Shan Coal International's three quarterly report shows that from January to September the company achieved operating income of 25.183 billion yuan, an increase of 146.38%; net profit attributable to parent company owners was 595 million yuan, an increase of 16.05%; earnings per share of 0.79 yuan. Among them, the operating income from July to September was 8.922 billion yuan, and the net profit attributable to owners of the parent company was 201 million yuan, and the earnings per share was 0.27 yuan.

For the performance of the company's stock price, Li Rongqiang said that the performance of the stock price is a kind of market behavior. As a listed company, Shan Coal International is also concerned about the company's stock price in the secondary market, but it is not the focus. The main concern of the company is how to become bigger and stronger. Only then can more investors focus on the company.