In the second quarter of the coal market will gradually stabilize downstream end of the first quarter of fast current situation has gradually stabilized coal prices rebound . Low supply of coal to suppress the supply side started the season with the steady growth of the economy and the policy is expected to gradually began restocking the downstream industry . However, we believe that the valuation of the coal stocks are very limited repair industry is still greater downward pressure to maintain " neutral" rating on the market outlook remains cautious wait -based.

Recalling the first quarter accelerated coal demand slump hit new lows . 2014 poor start to the economy is weak downstream demand continues to decline in coal coal prices plunged across the board late last year which fell by 13.1% coking coal power prices fell 16.6% in January-February total profits of the coal industry declined by 42.5% .

Coal market outlook in the second quarter and gradually leveled off at the bottom to stabilize the price of coal . As Bohai thermal coal index hit 530 yuan / ton, the lowest stabilized after a rebound . After the suppression of coal supply side low supply of coal mines , especially small and medium- cut coal production and sales slowed sharply ; demand-side end of the downstream industry on the one hand to the inventory gradually started coming season ; hand steady growth is expected to increase downstream economic policy gradually began to fill inventory.

With earnings rising financial risk downstream of the coal industry . Coal industry profits decline since 2012 gearing ratio rose receivable turnover decreased cash rheological difference this will affect the company's business and sales of coal is not conducive to a stable coal prices . From steel - coke - coal industry chain of steel , coke , coal rising rapidly among financial expense ratio of steel , coke industry since 2012, greater financial pressure resulting in a drag on the upstream industries.

Coke is still poor profitability of the industry since 2013, although exports began to recover , but we think it difficult to lead the coke export industry out of the woods .

On the one hand coke exports accounting is not high. 1.94 million tons of coke exports in the first quarter grew 646% domestic production accounted for less than 2 per cent in 2007-2008 and 2001-2003 monthly export volume of coke production ratio exceeds 15% of the history and future of the international market space with limited future consumption growth a slowdown in steel production slowed down . Other domestic coke overcapacity as domestic independent coking plant operating rate is not high remained at around 75% and has a large inventory pressures , such as Tianjin Port Coke stock hit three-year high . The coke export recovery will help enterprises to expand domestic coke market ushered in the industry but it is difficult to improve the profitability of reversal .