Coal 02 (Jul 12 - Dec 25)

[winston]

Mobius Bullish on China Coal as Valuations Rise From Lows

Chinese coal stocks are rebounding from their cheapest levels on record as investors including Mark Mobius bet that demand for the fuel will recover as winter approaches and inventories are trimmed.

http://www.bloomberg.com/news/2012-09-2 ... ws-1-.html

[winston]

not vested

<Research Report>Coal enterprises' 4Q earnings still under risks despite improved fundamentals - GS

Goldman Sachs said in a report that the domestic coal prices remained stable during the National Day holiday. The Bohai Sea price index rose slightly from RMB633 to RMB635 a week before the holiday. The port thermal and mine mouth prices continued to rebound.

The thermal coal prices rose, mainly driven by the winter storage demand. The downstream cement and steel prices recently rebounded, lifting the market expectation for future demand.

The important transport line Daqin is pursuing maintenance (October 8 -22), which restricts the supply.

The Bank believes that prices will rise in the short term. However, the coal price in the Qinhuangdao during the third quarter fell 18.5% against the 1H, the coal enterprises' earnings are under risk for this quarter. YITAI COAL (03948.HK) is rated Neutral with target $42.21.


Source: AAStocks Financial News

[winston]

not vested

Coal mine corporates M&A, coal resources mining rights integration to accelerated - Energy Board

Wu Yin, Deputy Secretary of the National Energy Board attended a forum yesterday and said Mainland saw rapid growth of coal supply, but the coal consumption slowed down, leading to high inventory.

As to the national coal output target of 3.65 billion tons, the output increase this year is to be restricted to less than 4%.

The mergers and acquisitions of coal mine corporates and the integration of coal resources mining rights are to be accelerated over a certain period of time to further enhance the concentration of the coal industry.


Source: AAStocks Financial News

[winston]

not vested

Coal price, demand rebound in Mainland

A newly released statistical figure show that the coal inventory in Qinhuangdao Port dropped below 6 million tons.

In addition, many coal varieties in the north have already seen shortage.

The coal price and demand, which continued to fall since May, show signs of rebound.


Source: AAStocks Financial News

[winston]

not vested

Coal price, demand rebound in Mainland

A newly released statistical figure show that the coal inventory in Qinhuangdao Port dropped below 6 million tons.

In addition, many coal varieties in the north have already seen shortage.

The coal price and demand, which continued to fall since May, show signs of rebound.


Source: AAStocks Financial News

[winston]

Chinese Coal

Coal inventory at major power plants are at record high of 31 days, the highest since our data series from 2007.

We think this is due to weak power demand and abundant coal supply.


Source: GS

[winston]

not vested

DJ MARKET TALK: DB Tips China Coal Sector To Underperform

1128 [Dow Jones] Deutsche Bank believes market expectations of a pick-up in the Qinhuangdao thermal coal price "will not be met," as IPPs are already well-stocked and imported thermal coal is again gaining strong price competitiveness (similar to June 2012).

"In our view, no further QHD price hikes and poor 3Q12 results will lead to another wave of 2012/2013 NPAT consensus downward revisions, as well as underperformance of the thermal coal sector," the house says.

DB rates China Shenhua (1088.HK) a Buy as a result of its defensive nature and sound management quality, and reiterates its Hold rating on China Coal (1898.HK) and Sell on Yanzhou Coal (1171.HK).

Source: Dow Jones & Company, Inc.

[winston]

Coal- Prefer coking coal to thermal coal

**we are cautious about a further thermal coal rebound but more bullish with coking coal..why is it different?

1/ thermal coal: cement price rebound and winter’s arrival improved thermal demand; however high power plant inventories (31 days now vs normally 20 days), falling import thermal coal price and the completion of Daqin Railway maintenance all could suppress domestic thermal prices;

2/ coking coal: rising steel and coke prices, though we argue steel price recovery is not sustainable due to steel production pick up, it is good for coking coal demand, rebounding international coking coal price and upward daily crude steel production will all support coking coal price (+Rmb 50 wow, +2%@ Rmb 1170).

Source: GS

[winston]

not vested

DJ UPDATE: China September Coal Imports Shrink on Slowing Economy

-- China coal imports drop, due to slowing economy and demand

-- Coal stockpiles at largest port, still higher than normal

-- Net imports may not reach 250 million tons this year


Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: DB Keeps Cautious View On China Coal Sector

1550 [Dow Jones] Deutsche Bank says while the market has recently been excited about the recovery of the Chinese economy, it keeps its cautious view on the thermal coal sector.

"Qinhuangdao price falls during a thermal coal peak season might be a catalyst for the market to rethink the sector's oversupply situation and thus further adjust down expected thermal coal prices for 2013/2014. Thus, thermal coal sector underperformance is inevitable."

Based on its new price assumptions, DB lowers its FY13 earnings forecasts for China Shenhua (1088.HK), China Coal (1898.HK), and Yanzhou Coal (1171.HK) by 1.2%, 3.4%, and 26%, respectively; it has a Buy rating on only Shenhua on the back of its defensiveness and maintain Hold for China Coal and Sell for Yanzhou Coal.


Source: Dow Jones & Company, Inc.