Coal is the core energy of the mainland, and the coal industry has been in a state of high prosperity thanks to the promotion of the production capacity cycle. Against the backdrop of supply constraints, long-term coal prices have been supported to some extent.
According to the degree of coalification from deep to shallow, coal is classified as anthracite, bituminous coal and lignite.
According to the classification of use, coal can be divided into fuel coal and raw coal, of which fuel coal is thermal coal in a broad sense.
In terms of coal types, thermal coal has the most abundant reserves, followed by coking coal, while anthracite reserves are relatively small.
Thermal coal is the coal that provides the power source, accounting for the vast majority of coal consumption and about 85% of total coal consumption, and plays a prominent role in the mainland's energy system. It is widely used in the fields of power generation, heating and building materials, and the current demand for thermal coal in the power generation sector continues to grow.
Coal Use Classification:
Source: MyCoal.com
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Overview of the thermal coal industry
As a resource, the distribution and quality of coal are extremely regional. There are significant differences in the coal resources owned by coal enterprises in different regions.
A total of 14 major coal production bases have been set up in the mainland, namely: Shendong, Jinbei, Jinzhong, Jindong, Northern Shaanxi, Mengdong, Lianghuai, Yunnan-Guizhou, Jizhong, Luxi, Henan, Ningdong, Huanglong and Xinjiang bases.
In coal quality assessment, the pricing of thermal coal mainly relies on the key indicator of calorific value. The calorific value of coal in northern Shanxi, Shendong and northern Shaanxi occupies the forefront in mainland China, while the calorific value of coal in Xinjiang, Ningdong, Jizhong and Lianghuai bases is slightly inferior, and the coal quality in Guizhou is relatively poor due to its high sulfur content.
Coal types of the country's 14 major coal bases:
Source: Xingxingcha
Since the implementation of the coal supply-side reform in the mainland, the fundamentals of the coal industry have been affected by multiple factors such as supply and demand and inventory. In addition, domestic policies have an important impact on the release of production capacity, and the adjustment and guidance of policies not only affect the production volume of coal, but also directly related to the balance of supply and demand and price fluctuations in the market.
On the demand side, coal is closely linked to the domestic economy. In the coal-fired power sector, which is the largest coal consumer, there has been a larger-than-expected increase in demand, and domestic production remains the core of meeting demand, while imported coal serves as an important supplement to ensure a stable supply of thermal coal from the mainland.
Competitive landscape and leading combing of thermal coal market
The quality of coal resources owned by coal enterprises directly affects the sales price and production cost of their products.
The minimum market price for coal is often determined by the firms with the highest production costs, and those that can operate at lower costs have a more distinct advantage in terms of earnings stability.
In order to further enhance the stability of profitability, coal enterprises are not only limited to the coal industry itself, but also expand the industrial chain to extend the layout to the fields of power and chemical industry, so as to achieve business diversification and stable income growth.
Major thermal coal companies in mainland China include China Shenhua, Shaanxi Coal, Yankuang Energy, China Coal Energy, Lu'an Environmental Energy, Huayang Co., Ltd., Shanmei International, Power Investment Energy, Jinkong Coal Industry, etc.
Headquartered in Beijing, China Shenhua is the most powerful integrated development enterprise of coal, electric power, transportation and coal chemical industry in China. Since its establishment in November 2004, the company has focused on six core business areas, including coal, electric power, railway, port, shipping and coal chemical industry, and has built a complete coal industry chain, including Shendong Mining Area in Shenmu City, Shaanxi Province, Zhungeer Mining Area in Ordos, Inner Mongolia, Shengli Mining Area in Xilinhot, Inner Mongolia, and Baori Hiller Mining Area in Hulunbuir City, Inner Mongolia, which account for 99.8% of the Company's total coal reserves.
Founded in 2008, Shaanxi Coal Industry is a large-scale enterprise with a complete coal production, sales and transportation system. Its coal products are widely used in electric power, chemical and metallurgical industries, and the company's 10-million-ton mines in the northern Shaanxi mining area have been clustered, further highlighting its production capacity advantages.
Yankuang Energy was established in 1997 exclusively by Shandong Energy Group Co., Ltd. In 2020, Yankuang Group and Shandong Energy were reorganized, and the former Shanneng Group became the controlling shareholder of Yankuang Energy, with a shareholding ratio of 45.73%. The company's coal reserves are mainly distributed in Australia and Inner Mongolia, with Inner Mongolia accounting for 41% and Australia accounting for 40%. Its Yankuang Australia subsidiary has benefited significantly from the rise in international coal prices, demonstrating its international advantages. #煤炭 ##煤##财经##电力##能源#
Founded in August 2006, China Coal Energy is mainly engaged in coal production and trading, coal chemical industry, coal mining equipment manufacturing and financial business. Its coal chemical business mainly produces olefins, urea and methanol and other products, and related businesses are mainly carried out in the Mengxi region.
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