GOLDEN SUN SECURITIES·2025-05-25 06:23Investment Rating - The industry investment rating is maintained as "Add" [2] Core Insights - The report highlights that the coal price adjustment has been ongoing since Q4 2021, with the market now recognizing the prolonged decline. It suggests that the bottom of the price cycle may be near, urging stakeholders to maintain confidence and focus on the industry's fundamental attributes [6][7] - The report emphasizes the challenges faced by the Russian coal industry, including rising production costs, declining investment, and logistical issues due to sanctions, which have led to a decrease in coal exports [4][5] - The global metallurgical coal market is experiencing a shift, with supply tightening due to disruptions in Australian coal supply, leading to increased prices for high-quality coking coal [5][6] Summary by Sections Coal Mining - As of May 23, 2025, Brent crude oil futures settled at $64.78 per barrel, down $0.63 (-0.96%) from the previous week, while WTI crude oil futures settled at $61.53 per barrel, down $0.96 (-1.54%) [1] - The report notes that the price of coal at Newcastle port (6000K) is $218.9 per ton, unchanged from the previous week, while the price at the European ARA port is $91 per ton, also unchanged [1][38] Production and Demand - Russia's coal production remains around 440 million tons annually, with coking coal production at approximately 110 million tons. Domestic demand for coal in Russia is projected to grow by 13.13% year-on-year in 2024, reaching 205 million tons [4] - The report indicates that the share of electricity coal demand in Russia is about 46% [4] Investment Recommendations - The report recommends several coal companies for investment, including China Shenhua (H+A), China Coal Energy (H+A), and others, highlighting their performance and potential for recovery [6][7] - The report suggests that the domestic coal companies are facing increasing losses, with over 54.8% of coal enterprises reporting losses as of March 2025, indicating a higher likelihood of production cuts [6][7] Market Outlook - The report anticipates that by 2050, global metallurgical coal demand will decrease from 1.099 billion tons in 2024 to 885 million tons, with significant shifts in demand from China to India [5] - It is projected that the price of high-quality Australian coking coal will gradually rise due to long-term structural shortages [5]