Coal prices rose again in 2011

Since the beginning of 2011, coal prices have continued to rise since last year, which may allow coal companies and power companies to continue to show their achievements this year.

“The cost of standard coal purchased by the five major power generation groups in January this year was 814 yuan/ton, which was a year-on-year increase of 75 yuan, or 10.15%, which was a month-on-month increase of 31 yuan or an increase of 3.96%.” An insider of one of the five major power generation groups Disclosed, "The current thermal power plant is in a state of loss."

This is not yet the highest, and the small power companies purchased more coal in January than the top five power groups. Jiang Tianshui, chairman of Zhejiang Tianma Thermal Power Co., Ltd., told the newspaper yesterday that the company's coal purchase price in January this year was 880-900 yuan/ton.

According to data released by the National Bureau of Statistics, the ex-factory price of coal mining and washing industry rose by 1.6% in January, of which the factory price of raw coal rose by 1.4% month-on-month. The above-mentioned insiders of one of the five major power generation groups stated: "If coal prices remain high this year, the thermal power industry is expected to be a loss of the entire industry."

Last year, the operating data of the five major power generation groups showed that Datang Group had a loss of 110 million yuan. Despite the profit of the other four power groups, it has experienced a significant decline from the previous quarter. The recent performance announcement of Huadian Power International (600027.SH;01071.HK) indicates that due to the significant increase in the price of thermal coal in the service area of ​​the company, fuel costs have increased, and net profit is expected to remain profitable in 2010, but it has fallen by more than 50% year-on-year.

Some of the listed power companies even suffered losses. Shennan Electric A (000037. SZ) announced that its forecast for the company's 2010 loss will be 110 million to 136 million yuan due to rising fuel costs and other factors. In 2009, the company achieved a net profit of 74,115,400 yuan.

In stark contrast to this, the performance of listed coal companies in 2010 has increased significantly. Leading China Shenhua (601088.SH) recently released a performance report saying that in 2010, the company achieved operating income of 152.1 billion yuan, up 25.3% year-on-year, and net profit of 37.2 billion yuan, up 22.8% year-on-year. The performance report of the open-pit coal industry (002128.SZ) also showed that the company achieved total operating income of 5.672 billion yuan in 2010, an increase of 21.68% year-on-year; net profit of 1.456 billion yuan, an increase of 48.90%.

The overall performance of China's thermal coal prices in 2010 was a volatile upward trend. China Everbright Securities's electric power industry analyst Cui Yuqin said that the average price of Datong Power Coal pits in 2010 was 5%~10% higher than that of 2009, and the average price of Qinhuangdao's thermal coal car board price in 2010 was 20% higher than the average price in 2009.

According to the above-mentioned insiders of one of the five major power generation groups, a 1% increase in the coal price will affect the profits of the power generation company by 100 million yuan.

Cui Yuqin believes that the possibility of rising coal prices in 2011 is still very high. On the whole, the cost of fuel for power generation companies will increase again. Due to the increase in inflationary pressure in 2011, in order to control inflation, the hope of the government to raise the price of electricity is low, so the operating environment of the thermal power industry in 2011 may further deteriorate.