Inner Mongolia, Liaoning and many other places have recently made every effort to increase coal production and stabilize prices to ensure increased coal production and supply.

Regarding the nuclear increase of coal mine production capacity, the Inner Mongolia Energy Administration issued an emergency notice on October 7, expressly allowing 72 coal mines in the four cities of Xilin Gol, Wuhai, Ordos, and Hulunbuir to increase coal production capacity with immediate effect on the premise of ensuring safety. Organize production according to the nuclear increase in production capacity. The industry expects that this part of coal mines will immediately begin to contribute to the increase in coal production, which will ease the current tight coal supply situation. Institutions believe that the pace of short-term capacity deployment may be lower than expected, and the industry's tight supply pattern will not be reversed during the year. It is expected that the performance of listed companies will gradually improve during the year, which may exceed expectations.

Fully promote coal production to increase and stabilize prices

Regarding the "Emergency Notice on Accelerating the Release of Part of Coal Mine Production Capacity" (referred to as "Notice") circulating on the Internet, a person from the Inner Mongolia Energy Administration told reporters that the above-mentioned "Notice" was indeed issued, but it was only released to coal sales companies. public.

According to the requirements of the "Notice", a total of 72 coal mines in Inner Mongolia have been included in the "National List of Nuclear Increase Potentials", and a total nuclear increase of 98.35 million tons/year is planned. Among them, non-central enterprise coal mines need to complete the relevant procedures for nuclear increase in production capacity before the end of October. The nuclear increase is 55.11% of the original annual production capacity of the 72 coal mines.

Industry insiders predict that since this part of the production capacity will be produced immediately and the nuclear increase process is required to be completed by the end of October, it is expected that this part of coal mines will soon begin to contribute to the increase in coal production in the future, which will alleviate the current coal supply shortage.

The above-mentioned relevant person from the Inner Mongolia Energy Bureau revealed that the current production increase measures are temporary, and the relevant coal mines can organize production according to the monthly average distribution of the annual production capacity after the nuclear increase. However, relevant coal mines can apply in accordance with the verification procedures, and after approval, they will be converted to permanent production capacity.

The reporter learned that as the peak of coal consumption for heating in winter in the north approaches, the peak of coal consumption is coming. For this reason, Inner Mongolia is making every effort to promote the release of coal production capacity. In order to stabilize the coal market, Ordos actively promotes qualified coal companies to handle the start-up filing and joint trial operation, and accelerate the progress of the construction of high-quality production coal mines. As of the beginning of October, the city of Ordos had a normal production of 225 coal mines with a production capacity of 640 million tons per year; the city's average daily output exceeded 2.1 million tons, reaching its peak this year.

On October 6, Liaoning Province held a special meeting on the work of ensuring coal power supply, emphasizing that all relevant departments and related enterprises must proceed from the overall situation of protecting the people's livelihood and ensure the continued funding of coal power enterprises. The relevant person in charge of the Liaoning Provincial Development and Reform Commission said that the next step will be to strengthen the province's coal mine scheduling and implement a weekly production report system. Comprehensively investigate potential safety hazards to prevent production shutdowns due to safety issues from affecting coal supply.

Ensuring a stable supply of energy this winter and next spring

On September 29, the responsible comrade of the Economic Operation and Regulation Bureau of the National Development and Reform Commission pointed out when answering a reporter's question on energy supply this winter and next spring that China's coal consumption has exceeded expectations, and supply and demand are tight. The National Development and Reform Commission has always regarded coal supply in the heating season as an important work for people's livelihood, and it has made every effort to increase production and supply under the premise of ensuring safety. Guide major coal-producing areas and key enterprises, scientifically formulate production plans, and safely and effectively release advanced production capacity. Further nuclear increase and production of high-quality production capacity. Support qualified coal mines with high-quality production capacity to release advanced production capacity.

At the same time, the National Energy Group held a party group meeting to study energy supply guarantee work, requiring efforts to stabilize production and supply and price. Coal production units strictly implemented the national guarantee supply requirements, and arranged production in the fourth quarter according to 1/4 of the annual approved production capacity. Fully reach production and increase supply with all efforts.

On September 29, Shanxi and 14 provinces (autonomous regions and municipalities) including Hebei, Shandong, Jiangsu, Zhejiang and Tianjin signed contracts for the medium and long-term coal supply guarantee for the fourth quarter. While Liaoning signed contracts with Shanxi for 3.5 million tons of coal resources, it increased the province’s coal production and coal storage efforts, requiring all localities to ensure that the heating coal storage capacity reached 60% before the opening of the bolt, 80% before New Year’s Day, and 100% before the Spring Festival. 

On September 30, the China Coal Industry Association and China Coal Transportation and Marketing Association issued a notice on further ensuring the supply of electricity and coal, clarifying that enterprises should give priority to ensuring long-term contract resources for power generation and heating users. In principle, the fourth quarter should follow Not less than 1/4 of the annual contract volume will be honored, and the performance rate of the signed power coal long-term agreement contract will reach or exceed 100% in the fourth quarter.

Financial support for coal and power companies is also increasing. On October 6, the China Banking and Insurance Regulatory Commission issued a relevant notice, requiring that the reasonable financing needs of coal-fired power, coal, steel, non-ferrous metals and other production enterprises be guaranteed, and bancassurance funds should be strictly prevented from affecting the normal order of the commodity market. It is strictly forbidden to misappropriate credit funds or bypass financial management, trust and other methods, and illegally participate in speculation and speculation in bulk commodities such as coal, steel, and non-ferrous metals, and make huge profits.

It is expected that the performance of listed companies will gradually improve during the year

Looking ahead to the medium and long term, some institutions are still optimistic about the coal sector.

Guotai Junan believes that the current market's concern lies in the gradual release of future supply, and coal prices may fall sharply. However, the core contradiction still lies in the supply. The short-term guaranteed supply production rate continues to be lower than expected. In the future, considering the limited new capacity, coal supply may be in a tight state before carbon peaks, and coal prices may remain high for a long time.

CITIC Securities believes that the intensive implementation of policies in the past two weeks has brought disturbance to market expectations. However, it will take time for the policy to be fully effective, and the industry's tight supply pattern will hardly be reversed during the year. It is expected that the performance of listed companies will gradually improve during the year, which may exceed expectations. In the context of the surge in overseas energy prices, continue to be optimistic about the sector market, and recommend companies that have gradually enlarged performance flexibility and have potential catalysts for their stock prices.

Zhongtai Securities pointed out in the latest research report that the main producing areas of Shanxi and Inner Mongolia have recently held the fourth quarter coal mid- and long-term contract signing meeting respectively, and the guaranteed coal supply is expected to be 55 million tons and 53 million tons respectively. It is expected that coal will be a scarce resource in the next few years, the stock capacity is high profits, and the assets need to be revalued. The stock price has not fully responded to this.

Chuancai Securities believes that according to current data, coal prices in the third and fourth quarters are highly probable events. The acceleration of industry profit growth means that there is a possibility of upward adjustments in the performance of the sector. It continues to be optimistic about the coal sector during the year.