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Home -> News -> News -> Industry News ->

2015 coal prices continue to decline enterprises actively looking for a way out

Words:[Big][Medium][Small] Mobile Page Two-Dimensional Code 2018-06-12     

As a basis for the energy industry, the plight of the coal industry always affects the country's eyes, weak demand, excess capacity, high inventory, prices falling, a large number of coal enterprise management dilemma, how to make coal industry out of the woods is always the key point of the countries concerned, 2014 note "coal trading regulation method" and "coal quality management method" which follows, clear specification of coal industry fees fund this year, we will intensify reform of taxes and fees, the related department this year began to increase coal production capacity management, coal linkage is intentionally ignore this year, and so on.It is no exaggeration to say that this year, the relevant authorities are throwing everything they have at policies that can help the coal industry out of trouble.

Policies will continue to play a role in helping the coal industry get out of trouble in 2015.

As of January 1, 2015, the interim measures for the quality management of commercial coal issued in September 2014 will be officially implemented.The measures set clear requirements for the ash content, sulfur content, calorific value, mercury, arsenic, phosphorus, chlorine, fluorine and other indicators of commercial coal.

Starting from January 1, 2015, all kinds of coal export temporary tax rates from the implementation of the six years of 10 percent to 3 percent.The cost of coal export has decreased, and some high-quality and advantageous coal exports may increase.

Falling coal prices are eating into the profits of listed coal companies like a bottomless pit.


In a survey of the 37 listed companies in citic coal sector, the total net profit attributable to shareholders of listed companies (hereinafter referred to as "net profit") in 2014 was just over 39 billion yuan, a loss of nearly 40% compared with the previous year.Among all the companies, only 6 achieved year-on-year growth in net profit, while the remaining 31 saw year-on-year decline, accounting for more than 80%, and 7 even suffered huge losses.


"Price volatility risk", which can be found in almost every prospectus risk tips, from white and black into reality, literally "hit" every coal company.In 2014, the average price of the bohai rim thermal coal index was 522 yuan per ton, down 11.4% year-on-year.As of May 6 this year, the index only closed at 421 yuan/ton, down nearly 20% from the beginning of the year, coal prices may become a big loss of coal industry "bombshell".


How to avoid the risk of coal price fluctuation has become a key issue for many enterprises.


"At the moment, there is no other way, either to optimize the allocation of resources, do a good job in inventory management, or to use the derivatives market, the combination of future and present to realize hedging, or else have to change careers."Industry insiders told China securities journal reporters.


Faced with unprecedented difficulties, listed coal companies are gradually changing their ideas.Reporter found that combing the relevant announcement at present including China shenhua and yanzhou, China coal energy, listed companies have been entering the steam coal futures market, going yun-dimensional shares, energy, shanxi coking enterprises such as hedging is becoming mature, and shanxi coal and datong coal, kam energy has said it will actively explore the futures market.


As industry insiders say, although large coal enterprises represented by shenhua participate in the futures market at present, there is still some sense of "stepping into the bathtub", but with the further development and improvement of the derivatives market, more coal enterprises will hold up the "umbrella" in the future.


Listed coal companies nearly 30 % losses


Sketch listed coal enterprise performance panorama, coal prices caused by the shock wave first came into view.


"In 2014, the selling price of self-produced coal of the company was 228.07 yuan/ton, which was 55.19 yuan/ton lower than that of the previous year, affecting the revenue by 5.465 billion yuan.The selling price of traded coal was 353.30 yuan per ton, down 28.56 yuan per ton year-on-year, affecting revenue by 1.018 billion yuan."Shaanxi coal said in its annual report that its operating income fell 2.069 billion yuan to 41.125 billion yuan last year, while its net profit attributable to shareholders of listed companies fell 2.535 billion yuan to 951 million yuan, a 72.71 percent drop.


The same "disease" almost swept all listed coal companies.In 2014, the coal selling price of yangquan coal industry decreased by 79.04 yuan/ton year-on-year, a decrease of 18.56%, reducing the sales revenue by 4.331 billion yuan year-on-year.The average selling price of xinji commodity coal, excluding tax, decreased by 49.39 yuan/ton year-on-year, or 11.64%, affecting the income by 807 million yuan.The average selling price of commercial coal of anyuan coal industry decreased by 52.94 yuan/ton year-on-year, a decline of 10.16%, affecting revenue by 380 million yuan......


In the industry point of view, coal prices continue to fall, rooted in the macro economic growth is slowing, energy structure adjustment and environmental pressure factors, coupled with excess capacity hidden trouble already buried, market oversupply phenomenon intensified in recent years, the coal companies are racing to cut coal sales into "price - reduction - to reduce the price" the vicious circle of "circle", the increasing percentage of loss-incurring enterprises of the industry.


According to the coal industry "report card" of 2014, among the 37 listed companies in citic coal industry, the net profit of the other 31 companies declined year-on-year, accounting for as much as 83.78%, except 6 companies, such as baotailong coal, datong coal, yanzhou coal, zhengzhou coal power, shanxi coking and shaanxi black cat.


Shenhua, an industry giant, also saw its performance slip last year.The company's operating revenue reached 248.36 billion yuan last year, down 12.5% year-on-year.Net profit reached 36.807 billion yuan, down 19.4% year-on-year.


As for the reasons for the decline in coal revenue, China shenhua said in its annual report that the company's coal sales volume reached 451.1 million tons in 2014, down 12.4% year-on-year, due to the sluggish market demand and oversupply in the coal market.In 2014, the weighted average coal selling price of the company was 351.4 yuan/ton, down 10.1% year-on-year.


Baotellong and datong coal were the most prominent performers in terms of year-on-year growth in net profit last year, with baotellong's net profit rising 504.01% year-on-year to 70.4439 million yuan.Datong coal industry turned a deficit into a profit, from a net loss of 1.4 billion yuan in 2013 to a net profit of 149 million yuan in 2014, with an increase of 110.64%.


However, the growth of the two companies mainly benefited from non-recurring gains and losses. Among them, baotailong received 37.8435 million yuan in compensation for the profits of the original shareholders of the coal mine and income from the purchase of financial products, while datong coal earned 1.26 billion yuan from the sale of the same jialiang mine and silaogou mine to the same coal group.


Among the 37 listed coal enterprises, 7 of them suffered net losses, and the most serious one was sinc xinji, which had a net loss of 1.969 billion yuan, becoming the "king of losses" in the coal industry.According to sdic xinji, due to the influence of national economic slowdown and economic restructuring, the demand for coal has decreased, and the coal market price has continued to decline, resulting in a significant decrease in sales revenue.


Also based on product sales decline and coal prices, and other factors, many coal companies struggle in the profit and loss line.Excluding non-recurring gains and losses, 10 listed coal enterprises reported net losses last year, accounting for more than 27%.The net loss of sinc xinji, shanmei international, datong coal industry and yunwei shares reached 1.932 billion yuan, 1.71 billion yuan, 1.229 billion yuan and 1.062 billion yuan respectively.The net losses of coal gasification, *ST antai, black chemical, baihuacun and zhengzhou coal power were 988 million yuan, 703 million yuan, 291 million yuan, 251 million yuan and 200 million yuan respectively.Hengyuan also reported a net loss of 38.36 million yuan.


Hedging large coal enterprises explore the way


After the beginning of summer is full, the weather will become hotter, but the coal industry is still dormant in the long "winter" shivering.


The latest round bohai sea thermal coal price index released on May 6 showed that the price of 5,500 kcal thermal coal closed at 421 yuan per ton, down 19 yuan per ton from last week, the biggest weekly drop since January 2014.Meanwhile, the wenhua thermal coal futures index is down nearly 16% this year and briefly fell below 400 points to 398.4.


Fall deeper and deeper coal prices have become more and more unbearable coal enterprises.Facing the cyclical dilemma of the industry, how to break through the encirclement has become a heavy problem that the whole industrial chain is thinking about.Large coal enterprises, represented by China shenhua coal, yanzhou coal and China coal energy, began to try to use the futures market to serve the real industry.


Shenhua previously announced that it plans to invest no more than 300 million yuan in thermal coal futures hedging margin.Although the company did not disclose the information of its participation in thermal coal futures in the 2014 annual report, the annual report shows that the initial balance of its derivative financial assets is about 106 million yuan, the ending balance is about 43 million yuan, and the impact on the current profit is about 15 million yuan. Its derivative financial instruments are mainly cross-currency interest rate swap contracts.The company also said that in order to cope with market competition risks, it will launch the futures business of hedging risks and increase the development of new markets.


Yanzhou coal said in its annual report that it began buying thermal coal futures contracts from Shanghai intermediate futures co in August 2014, with the fair value of liabilities formed by the contracts at the end of the year being 660,000 yuan.The company also announced in late march that it plans to carry out thermal coal futures hedging business in 2015 with a maximum position of 2 million tons, a minimum margin of 500 million yuan and a stop loss of 20%.In addition, the company will invest 244.56 million yuan stake in Shanghai intermediate futures 33.33%.


After the "steady progress of thermal coal futures business" in 2014, China coal energy announced again this year that in order to effectively reduce the operational risk caused by the fluctuation of thermal coal spot market price, improve the enterprise's operational level and anti-risk ability, the company plans to invest no more than 400 million yuan in thermal coal futures hedging business in 2015.


According to the statistics of China securities journal, in 2014, yunwei stock started hedging business for thermal coal, methanol, coking coal, coke, rebar and other products, which effectively alleviated the risk of price reduction of related products and reduced the loss by more than 37 million yuan.The initial investment amount of jizhong energy in futures was 8 million yuan, and the actual profit and loss of that year was 5.94551 million yuan.At the end of 2014, the balance of futures margin of shanxi coking co., ltd. was 6904 thousand yuan.


So far, in addition to the listed coal enterprises, shaanxi coal industry, datong coal industry, meijin energy and other listed companies have indicated that they will actively explore the futures market.Shaanxi coal industry publicly stated that it would actively change the thinking concept of coal production and sales to provide coal services, promote coal spot, futures, electronic trading and supply chain finance with shaanxi coal trading center as the platform, and innovate new coal trading modes.


Activate trading to act as an "umbrella"


Slow growth in demand, production capacity continues to release, prices continue to fall the winter is far from over.


The coal market continued to deteriorate in 2015, with listed coal companies reporting even worse first-quarter results than last year.


Facing "the most difficult period in history", "to die" is no longer the hard truth.It is of great significance for coal enterprises to learn the knowledge of futures and take derivatives to hedge the risk of market price fluctuation.


"The move will help companies effectively avoid market risk, reduce thermal coal spot market price fluctuations on the company's production and operation, the effect of making full use of the futures market hedging function, the price discovery function, reduce and avoid risks brought by the coal market price fluctuations, expand sales channels, improve the profitability of the company as a whole."Yanzhou coal industry to carry out thermal coal futures hedging business, citic securities so comments.


Since power coal futures market, its price discovery function has been recognized by the market, the industry has sprung up to expand the state-owned enterprises' utilizing of futures tools "jin surplus pattern", through the period is combined with the steady development of the spot trade "rui MAO tong experience" and so on the typical cases, and some coal upstream and downstream enterprises gradually from the negotiated pricing to pricing at the futures price.


However, thermal coal futures market activity still needs to improve."The daily trading volume of thermal coal futures is basically maintained at around ten thousand hands. Compared with the fully marketized coking coal industry, the customer participation degree of thermal coal industry is not high, and its trading status obviously cannot match the status of commodity carrier."Industry insiders said.


According to Lin hui, a researcher of xingzheng futures, there are three main reasons for its lack of activity. Firstly, most upstream and downstream enterprises are state-owned enterprises, and the cumbersome process and assessment pressure discourage enterprises' enthusiasm to participate in futures hedging, thus leading to low participation of large enterprises.Secondly, there are certain uncertainties in delivery and other links, leading to less market hedging power;Finally, thermal coal contracts are large, trading at 200 tonnes per hand, dampening the speculative enthusiasm of some retail participants.


"The discovery and risk aversion functions of futures require both buyers and sellers to enter the market.If only one party enters, the market will deviate from the price attribute and cannot function as a futures."Feng xiao, researcher of nanhua futures, believes that futures companies and exchanges need to continue to actively promote thermal coal futures, and promote coal enterprises and downstream power enterprises to make better use of futures tools in production and operation, and constantly improve and innovate the ways and modes of futures serving the real economy.


Of course, in order to better use the futures tool this "double-edged sword", coal companies can not fight "unprepared war".Industry leader shenhua may risk control measures as demonstration sample: first, to establish a scientific and standardized organizational structure and internal control system construction of hedging structure, make decisions, transaction is separated from risk regulations, formulate the futures hedging related duties, business processes and futures business risk management system;Second, we should stick to the strategic positioning, strictly observe the hedging principle, and put an end to speculation. We should stick to the spot management as the benchm


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