Changjiang Securities·2025-08-17 09:44Investment Rating - The report maintains a "Positive" investment rating for the coal and fuel consumption industry [10]. Core Insights - Recent expectations of steel production restrictions have raised concerns about a potential decline in coking coal demand, which could suppress coking coal prices. However, historical data suggests that administrative production restrictions often lead to a rapid recovery in steel mill profits, reducing their willingness to pressure upstream material prices, resulting in a co-resonance price increase for both steel and coking coal. If steel production is reduced due to significant losses, both steel and coking coal prices tend to decline together [2][7]. - Looking ahead to 2025, steel mill profits remain favorable, and the motivation for voluntary production cuts is low. If administrative production cuts occur, there is potential for a co-resonance price increase in coking coal, leading to absolute returns in the equity sector [2][7]. Summary by Sections Recent Tracking - The coal index (Yangtze) fell by 0.81%, underperforming the CSI 300 index by 3.18 percentage points, ranking 30th out of 32 industries. As of August 15, the market price for Qinhuangdao thermal coal was 698 CNY/ton, up by 16 CNY/ton week-on-week. The price for main coking coal at Jingtang Port remained stable at 1610 CNY/ton [6][21]. - The supply of coking coal is tight due to production control measures and stricter safety regulations ahead of military parades, which may support prices in the short term [6][22]. Market Performance - The report highlights that the coal sector has seen a decline of 0.81% in the past week, with the thermal coal index down by 0.93% and the coking coal index down by 0.55% [21][27]. - The report also notes that the coal sector has increased by 4.80% over the past month and by 3.41% over the past year [29]. Investment Recommendations - The report recommends focusing on companies with strong fundamentals and potential for improvement, including: 1. Elastic stocks: Yanzhou Coal Mining Company, Jinneng Holding, Huayang Co., Lu'an Environmental Energy, Pingmei Shenma Energy, and Huaibei Mining. 2. Long-term stable profit leaders: China Coal Energy, China Shenhua Energy, and Shaanxi Coal and Chemical Industry. 3. Transition growth: Electric Power Investment [8]. Company Highlights - China Shenhua plans to acquire assets from the State Energy Group and raise funds through a share issuance [70]. - Jizhong Energy reported a 27.87% decline in revenue for the first half of 2025 [71]. - Lu'an Environmental Energy's coal production in July decreased by 9.13% year-on-year [72].