HTSC·2025-08-07 06:43Investment Rating - The report maintains an "Overweight" rating for the coal industry [7] Core Viewpoints - The report suggests that the market does not have significant differences in expectations for short-term coal price increases, but the divergence lies in the price trends during the off-season, which will influence next year's long-term contract negotiations [12][15] - The report identifies three key conditions that will determine whether the off-season will be "not off-season" for coal prices: 1. Production cuts could reduce supply in the second half of 2025 by between 32 million tons and 110 million tons [2][13] 2. If the import pace from the first half of 2024 is maintained, imports in the second half of 2025 could decrease by 72 million tons [3][34] 3. If peak load continues to exceed expectations, coal consumption for thermal power generation could increase by 6.5 million tons year-on-year in the second half of 2025 [4][48] Summary by Sections Section 1: Current Market Conditions - In July, extreme high temperatures combined with reduced water inflow led to a rebound in coal prices, which increased by 51 yuan/ton (8.3%) to 666 yuan/ton as of August 4 [1][22] - The overall electricity demand has significantly increased due to high temperatures, with the highest national electricity load reaching 1.508 billion kilowatts, an increase of 5.7 million kilowatts compared to last year [16] Section 2: Supply and Demand Analysis - The report emphasizes that even without the impact of the current "production cuts," the supply-demand balance for coal will tighten by 11 million tons in the third quarter of 2025 due to increased coal consumption [12][56] - The report outlines three scenarios for potential production cuts, estimating a reduction in supply ranging from 32 million tons to 110 million tons in the second half of 2025 [2][31] Section 3: Import Trends - The report anticipates that if the import levels from the first half of 2025 are maintained, there will be a total reduction of approximately 100 million tons in imports for the year [3][44] - The average monthly import in the first half of 2025 is projected to be 28.13 million tons, down from 35 million tons in 2024 [3][44] Section 4: Thermal Power Consumption - The report maintains an assumption of a 5.5% increase in overall electricity consumption for the year, with thermal power generation expected to increase by 6.1% in the second half of 2025 [4][48] - If peak load continues to exceed expectations, thermal power generation could consume an additional 6.5 million tons of coal year-on-year in the second half of 2025 [4][48] Section 5: Recommendations - The report recommends investing in leading coal companies such as China Shenhua and Shaanxi Coal, predicting that these companies will benefit from the expected increase in coal prices [5][14] - The report estimates that as coal prices rise from 600 yuan/ton to 700 yuan/ton, the profitability of major companies will increase by approximately 4% to 15% [5][65]