Industrial Securities(SH:601377) 智通财经网·2025-08-06 02:04Core Viewpoint - The report from Industrial Securities focuses on the "anti-involution" policy leading to supply contraction benefits and valuation recovery opportunities in the coking coal industry. It suggests that with policy support for the exit of backward production capacity and tightening supply expectations, coking coal prices are likely to continue rising, entering a recovery phase in profitability from the third quarter onward [1]. Group 1: Coking Coal Market Dynamics - Coking coal is a core raw material for steelmaking, characterized by significant policy-driven price fluctuations and resource scarcity. The national recoverable coking coal reserves are only 395 billion tons, with strong coking coal and fat coal accounting for only 24% and 13% respectively, highlighting its scarcity [1]. - The coking coal resource endowment shows a "two low, one high" feature: low resource reserves and low coking ratio, while the high aspect is the significant proportion of Shanxi coking coal resources, which account for 43% of the total [1]. - From 2012 to 2025, strong policy interventions have been crucial in reversing market downturns and reshaping the coking coal market dynamics [1]. Group 2: Supply and Demand Changes - The coking coal production share is shrinking, with a compound annual growth rate of -0.6% over the past 11 years, lagging behind raw coal growth by 2.7 percentage points. The share of coking coal in total raw coal production has decreased from 13.0% to 9.9% [2]. - Mergers and acquisitions are driving capital expenditures, but future supply growth is limited. The expected average annual net new coking coal capacity from 2025 to 2028 is only 7.25 million tons, representing just 0.52% of existing capacity [2]. - Coking coal costs are rigidly increasing, with average annual cost growth of 5%-9% from 2018 to 2024 due to factors like smart upgrades and safety investments. If coal prices drop by 250 yuan/ton from 2024 levels, 50% of production could face cash flow losses, indicating limited price decline potential [2]. Group 3: Import Trends and Market Saturation - The coking coal import volume has seen significant fluctuations, with a peak increase from 6.76 million tons in 2008 to 75.42 million tons in 2013, a cumulative growth of 10.2 times. However, since 2025, the import volume may have reached its peak, with Mongolian and Russian coal imports accounting for nearly three-quarters of total imports [3]. - The Mongolian coal imports have decreased by 4.79 million tons year-on-year, while Russian coal exports are constrained by costs and transportation issues, leading to an overall 8.0% year-on-year decline in total coking coal imports [3]. Group 4: Industry Profitability and Valuation - The current industry profitability is at a near 15-year low, with net profit at the 28.5% percentile and gross margin and ROE at the 35.7% and 21.4% percentiles respectively, indicating a deep adjustment in the industry [4]. - The asset-liability ratio has significantly decreased from previous peaks, enhancing the industry's risk resistance capabilities. As of July 31, the coking coal sector's price-to-book ratio is below 0.8, at the 11.6% percentile over the past five years, suggesting substantial room for valuation recovery [4].