Source: Snow Ball APP, Author: Bu Da Financial Diary, (
Investment, please think independently. This article does not take any investment advice.
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$ Alpha Metallurgical (AMR) $ $ Mongolian Coke (00975) $ $ Nagobi (01878) $
The West, which is represented by the AMR Arch HCC WHC -the main Sam and the kangaroo country -coke coal (also known as the metallurgical coal) company, has rely on the coal prices brought by the Russian -Ukraine conflict in the past two years to increase the debt of their buttocks.Both have begun stock buyback.This article tries to figure out, what factors of the factors have led to the current (2023-2024) coking coal price is much higher than before the epidemic, which of these factors may be maintained for a long time.I focus on coking coal instead of heat coal.Thermal coal is used for heating and power generation. It has more environmentally friendly alternatives (natural gas). Coking coal is used for steelmaking. There is no alternative to the short -term period.
Let’s talk about it first.
Factors 1: The high price of coking coal is caused by the Russian -Ukraine conflict.
Conclusion: No.Let’s talk about the background first.The export market of coking coal is very concentrated. In the exporting country, Australia accounts for 50%of the total exports, 16%in Russia, 13%in the United States, 9%in Canada, and 5%in Mongolia.The sanctions brought about by the Russian -Ukraine conflict have caused the Russian coking coal export destination to be forcibly changed, breaking the balance of the previous import and export market, thereby causing a rapid change in the short -term price -the coking coal exported by the United States and Australia was given to the EU to fill Russian coal.Gossip has led to a sharp rise in the United States and Australia’s Spot Price, and Russia’s coal was originally exported to the European Union and Japan.
Look at the picture below at a glance (Title: Russian Coking Coal Export adapted to sanctions and restrictions in 2022).
That’s the question — Is the change of this kind of export line on price for a long time?
To answer this question, you can directly see the coal price before and after sanctions.Above.
The first is Australian coking coal, and the second is Australia’s 6000 Kcal/KG power coal (this is a relatively high -level and relatively small -polluted coal, which is favored by developed countries).The trend is similar. When the epidemic resumption is expected to be full (early 2021) until the Russian -Ukraine conflict began (note, it was before), the price of coking coal has risen to about 50%higher than before the epidemic ($ 200-> $ 300).The short-term effects brought by the conflict and sanctions passed. When the export reaches the balance (2023 Q2 until the beginning of 2024), the price has returned to the position before the Russian-Ukraine conflict, which is still about 40-50%higher than the pre-epidemic.
The above data is definitely not perfect. When 2021 is when the Western world economic recovery is expected to be full, it is also the most tense supply chain in the world, and the price of coking coal futures may be high.
This absolute value of the price can be smoothed with relative prices -then look at the difference in price difference between Australia and Russia’s export coal.
No coking coal is found. The above is a picture of 5500 Kcal/KG thermal coal.It is relatively obvious here. Most of the difference between 2022 Q2 Q3 due to sanctions, most of them have been gradually eliminated since 2023.
Initial conclusions, the long -term impact of this factor in Russia and Ukraine on coal prices is not zero, at least not the dominant factor.Actification can also get a reasoning. When the Russian -Ukraine conflict is over, the export price of Australian coke coking may have a short -term exploration, but the probability will not fall sharply for a long time for this reason.
Factors 2: The cost caused by Western inflation increases
Cost is an important factor, but not essential.For, the main role of cost is to eliminate the most expensive marginal capacity when the capacity is overcapacity, which does not meet the tight supply and demand relationship between coking coal in recent years (depending on factors three).
In addition, the cost of coking coal in 2022 was 36%higher than 2021, but we saw that the price of coking coal under the stable (at the end of 2023) is 40-50%higher than before the epidemic.The relative proportion can only be said that in the context of rising inflation costs, coking coal companies have been making money in recent years.
The cost distribution of 2022 coking coal is shown in the figure below:
Factors 3: Supply and Demand (SUPPLY)
Supply and demand is of course the most essential factor that determines the price.Most of the metallurgical coal exported by the United States and Australia is mostly priced by futures Spot Price instead of long -term associations, so the company’s selling price can reflect the supply and demand relationship at that time in a timely manner.
Let’s talk about demand first.
Provide three highly concentrated data:
1) About 80%of coking coal around the world is used for steelmaking.
2) In the world’s steel output, more than 80%of the steelmaking method (that is, Blast Furnace, hereinafter referred to as BF) is smelted by a coking coal.
3) BF smelting steel method, 1 tons of steel requires about 0.78 tons of coking coal
钢 钢 — There are three methods for steelmaking methods: 1) Blast-Furnace (BF) SLAG) of steelmaking (Basic-Oxygen-Furnace (BOF) SLAG) and 3) arc furnace steelmakingElectric-Aarc-Furnace (EAF) SLAG. In these three methods, BF requires coking coal.
These three data lead to the high linear correlation of the demand for steel and the demand for coking coal, which also indirectly leads to high correlation between steel prices and coking coal prices. Look at the figure below, the price correlation is 0.95.
So what about the demand for steel in the future?Uh, where do I know.
Below is a global and Indian steel quantity prediction map of Wood Mackenzie. This kind of tribe predicted for decades, but in the future, India is probably the main force of increment.Under the background of China and the United States, India rises towards the world No. 2 factory. I speculate here that Monish is an Indian who has exchanged with India high -level high -level political and businessmen to invest in MET COAL., It may have something to do with his background, purely conjecture.
Since we can’t answer the question of global steel, we try to narrow the scope.For the coking coal company in the United States, their coal prices depend on the import and export market, and the largest players with import and export are India and India. The two have alternated the number one of the import volume of coking coal in the past few decades.Looking at the figure below, the prosperity cycle of coking coal 2008-2010 is caused by India’s quickly coming out of the 2008 financial crisis, which is caused by infrastructure.Moreover, India’s coking coal mining volume is lower than local demand, and India ’s local scorch resources are seriously scarce (more than 70%are imported by imports), so can we simplify the problem intoJaipur Wealth Management? How can we change the demand for steel in India and India in the future?As mentioned earlier, the high probability of positioning the second world factory in India will increase the demand for steel, while India, even in the context of the great slowdown of real estate in the past few years, the import volume of coking coal has not been significantly attenuated (60mst imported in 2018, 2021 2021, 2021Imported 55mst, 2022 is 64MST).In the long run, the increase in steel volume is not a problem.Hu Guyou, the growth rate of steel is estimated to be 3-5%/year (eliminating inflation) that matches the growth rate of China-India GDP.
Besides supply (support)
For consumer products, competition eliminate value; yes, supply to eliminate value.
Here we must thank extreme environmental protection and the so-called ESG (ESG represents environment -NVIRONMENTAL, Social and Governance-Governance) in the Western world.The pursuit of environmental protection and green renewable energy allows the coal industry to basically become the national public enemy of the Western world. The capital is around — without borrowing (Bank does not borrow), the company cannot buy insurance, and wants to open a new coal mine.IntersectionWaiting for three or five years, Permit may not be approved, and the residents will be approved to be demonstrated to a demonstration.At a shareholders’ meeting, Mr. Munge said (referred to in the United States) to open a coal mine, just like you want to take the initiative to get a cancer.Something. "It’s crazy.
Anyway, because Australia, the United States and Canada are all coking coal exports (they accounted for 70+%of the total export of coke coal)Chennai Investment. Of course, this public opinion environment is limited to supply expansion, and it is also very good for our investment. The premise is that objective dataIt can prove the restrictions of supply.We are investing in investment, don’t pat your mind.
Here I prepare to use Australian data as the basis for analysis. The reasons are as follows: 1) I am lazy, and I am too lazy to summarize global data 2) Australia is a large coke export country (40-60%of the total export volume).The construction data is very comprehensive, open and transparent, and can accurately trace the historical data of over the past ten years.
The question we want to answer here is: Because the rise of ESG is the speed of Australian coking coal production, the speed of new output of Australia is significantly slowed down (or even the growth rate)?Pune Investment
Looking at the IEA Coal Report of the past ten years (2011-2023), each issue has a data, which is based on the coal mine mining project that has been reported that year. It is expected that the total increase in total after 5 years.There are two types of projects that have been reported. One is the "reliable" development project, that is, the company has approved the budget/government has already approved Permit, and the other is the "not yet spectrum" development project.We only look at the previous one.Then, we took out the actual production volume of these five years. In addition to the increase in production predicted this five years ago, this ratio was used to calculate how many "reliable" development projects at that time were actually implemented.
This ratio tells us how the proportion of coal mine development projects changes over time.
For example, in the Report in 2011, based on the reliable child project reported at the time, the increase in coal mining in 2016 was 50 MTPA. In fact, the mining volume of more than 2011 was 47 MTPA in 2016, which means 47/50 = 97%of the new mining incrementation finally landed.
This ratio is of course not perfect, there are the following problems:
1. Actual mining increment is affected by the short -term fluctuations of the annual output (such as the flood of typhoons this year, or the output of the year collapsed by a certain mine).But because we have calculated the data of 8 years, the impact of random factors should be able to smooth
2. In addition to the influence of new minerals, the total mining increment is also affected by the changes in existing mineral outputNagpur Stock. However, it should be noted that the existing "expansion of production" of minerals is considered to be in the new "development project" because the expansion of production is expanded.The new Permit is also required, and the maximum mining volume is set when each mine is criticized. This cannot exceed.Therefore, for the developed minerals, their actual mining volume can only be less than equal to the maximum minimum mining volume.
3. The definition of the so -called "reliable" project in the IEA report is not very clear and the statistical caliber has changed slightly over time, resulting in the denominator is not very accurate, but the difference is not bad.
Okay, then this ratio chart is as follows:
Is it exaggerated?The proportion of projects in the past 7 or 8 years has fallen all the way.Since 2020, it has been negatively increased compared with the past five years. We can guess the impact of the epidemic in 2020 and 2021, but the decline of this proportion during the 2016-2019 period is convincing.
Another data is that I followed the IEA report 2014-2023 All Australian coal mine projects that have been mentioned in Australia. There are three types of projects here: 1) New Mine 2) Existing ore expanded production 3) Creation ore Reopen
Use ChatGPT to raise all the names mentioned by the mine, and then I go through the financial report to track the actual output of each mine OVER TIME.This statistics mainly covers a new mine with large output, which is definitely not comprehensive, but from 2014 to 2023, these twenty mines have added a total of 9 MT coking coal production per year.EssenceToo few.Australian coking coal exports are around 180 mt. Even if the safety factor of X2 is added, the production capacity of new mine coking coal has risen by 9×2/180 = 10%in the past ten years.This is not the loss of coal mines (I haven’t found the data, ask the big guy to teach).
To sum up the conclusions:
1. The price of coking coal caused by the Russian -Ukraine conflict has soared to a short -term impact
2. In the context of the rising costs, it cannot be used as a single factor to explain the rise in coke prices as a single factor.It can only be used as a basis for long -term price support
3. In the past ten years, the new production capacity of coking coal has become slower and less and lessJaipur Stock. The long -term export supply is the most favorable factor that may support long -term high prices
4. Seeing the coal company, long -term investment is optimistic that coking coal is better than power coal. It is best to export a large amount of coal production and export a large number of companies in East Asia and Southeast Asia (especially India).
Investment, please think independently. This article does not take any investment advice.
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