2015-12-272016 annual coal industry strategy: cautious and wait for change
Weak demand and supply of coal from the loose intensified. 2015 industry supply and demand continued to loose the one hand from further deterioration of demand, downward trend in economic growth, adjusting the economic structure of the pressing energy consumption, the rapid development of new energy, reflected in the final three-year decline in the expansion of coal production. Superimposed run continuously low cost production capacity, thermal coal, coking coal declines of about 30%, 20%.
2016 annual outlook: No pole
Clunker demand, the industry will enter the coldest "March" days. Property subject to high inventory and revenue growth decline is expected next year the real estate and infrastructure investment growth clunker, while environmental pressures and continued development of new energy sources will lead to a greater demand for coal repression. On the supply side in 2016 is located in the tail end of the current round of peak production, supply and demand side of the mismatch will continue, industry profits will be further down.
Supply-side reform: Rain Comes from Wind
Supply-side reform mean for the industry production capacity clearing, but the current profitability difficult. The coal industry and the high proportion of state-owned capacity to assume more social responsibility, the current profitability of the industry is not enough large-scale implementation of the Forced policy, promote the essence of supply-side reform more difficult.
On a supply-side reform: capacity closures, staff split, reducing the leverage of the three characteristics. The last round of supply-side reform period earnings decline during gestation, gradually deepening in increasing loss, under the Forced debt burden and substantial losses on a large scale industry, and ultimately rebalancing supply and demand in the industry, after the end of a profit recovery. The overall performance of capacity shut down, staff split, reducing the leverage three characteristics, policy intervention, capital involved two means.
Capital market may become the main battlefield, 2016 Forced policy will continue to deepen. Improvement from the current national development and capital market size, the stock market can take in the current round of industry capacity in clearing more accountable similar round of capital involved, the industry, the group, listed companies and investors could benefit reform the direction of less resistance.
2016 Forced policy will continue to deepen, substantive implementation would be 2017--18 years. Although the difference between the current industry profits, but not enough to supply-side reform Forced large-scale implementation, we expect 2016 will continue to increase the intensity of the policy, and possible pilot projects, a substantial supply-side reforms will promote large scale in 2017-18.
