Group 1: Modern Coal Chemical Industry Development - Inner Mongolia has established a trillion-level modern coal chemical industry cluster, leveraging its abundant coal resources to develop a new chemical industry system focused on coal-to-oil, coal-to-gas, coal-to-methanol, and coal-to-olefins [2][3] - The region's coal chemical industry has achieved a comprehensive capacity of 38.35 million tons, with coal-to-gas, coal-to-olefins, and coal-to-methanol capacities ranking first in the country [4] - The Baofeng coal-based new materials project has an annual capacity of 3 million tons, making it the largest single coal-to-olefins production project globally [2] Group 2: New Energy and Equipment Manufacturing - Inner Mongolia aims to establish a new energy supply system, with plans to exceed coal-fired power generation capacity by 2025, achieving a total installed capacity of 135 million kilowatts by the end of 2024 [5] - The region is developing a comprehensive new energy equipment manufacturing industry, with local supply rates reaching 85% in wind power equipment production [6] - The focus is on creating a distinctive industrial chain for new energy equipment, including wind, solar, hydrogen, storage, and vehicles [6] Group 3: Economic Growth and Industrial Upgrading - Inner Mongolia's GDP is projected to reach 2.6 trillion yuan in 2024, with a year-on-year growth of 5.8%, ranking 20th nationally [8] - The manufacturing sector has shown remarkable growth, with a 9.3% increase contributing nearly 50% to industrial growth [8] - The region is focusing on traditional, emerging, and future industries, aiming to enhance competitiveness and promote high-quality economic development [9]

Group 1: Report Overview - Report Type: Coke and Coking Coal Daily Review [1] - Date: May 14, 2025 [2] - Research Team: Black Metal Research Team [3] Group 2: Market Review Futures Market - On May 13, the main contracts 2509 of coke and coking coal futures opened higher and closed lower, approaching the lows of the 9 - contract since June 15, 2017, and September 20, 2016, respectively, and then rebounding slightly in the afternoon. The closing price of J2509 was 1447 yuan/ton, down 0.69%, with a trading volume of 21,211 lots and an open interest of 52,046 lots. The closing price of JM2509 was 870.5 yuan/ton, down 0.85%, with a trading volume of 429,310 lots and an open interest of 427,320 lots [6]. Spot Market - On May 13, the daily KDJ indicators of the 2509 contracts of coke and coking coal declined, with the J - value and K - value turning down and the D - value continuing to slide. The daily MACD green bars of both contracts expanded. The quasi - first - grade metallurgical coke flat - price index remained unchanged in some ports, and the low - sulfur main coking coal price in Tangshan decreased by 40 yuan/ton [9]. Group 3: Industry News - As of May 12, the average daily shipment volume of the Datong - Qinhuangdao Railway in May was 122.42 tons, and the average daily approved train number of the Hohhot Railway Bureau was 27.7. The shipment volume of the Datong - Qinhuangdao Railway increased slightly compared to the maintenance period in April, but the overall volume was at a medium level. The approved train number of the Hohhot Railway Bureau decreased significantly after the May Day holiday [11]. - Nanjing Iron and Steel Co., Ltd.'s subsidiary won the exploration right of Fanqiao Iron Mine in Huoqiu County, Anhui Province, for 920 million yuan [11]. - China's automobile production and sales exceeded 10 million for the first time in the first four months of this year. From January to April, the production and sales of new energy vehicles were 4.429 million and 4.3 million respectively, with year - on - year growth of 48.3% and 46.2%, and the new energy vehicle sales accounted for 42.7% of the total new vehicle sales [12]. - In April 2025, the sales of excavators by major manufacturers were 22,142 units, a year - on - year increase of 17.6%. From January to April, the cumulative sales were 83,514 units, a year - on - year increase of 21.4% [12]. - In April 2025, Russia's seaborne coal exports were 13.3825 million tons, a month - on - month increase of 9.94% and a year - on - year decrease of 6.36%. The seaborne coal exports to the Chinese mainland were 5.1356 million tons, a month - on - month increase of 46.07% and a year - on - year decrease of 18.57% [12]. - In April 2025, the coal exports from Russia to China by rail were 8.226 million tons, a month - on - month decrease of 4.05% and a year - on - year increase of 19.36% [12]. - Russia plans to increase coal production capacity by 250 million tons by 2025 and aims to supply 40 million tons of coking coal to India annually by 2035 [12][13]. - In April 2025, the coal exports from Gladstone Port in Australia were 4.396 million tons, a year - on - year decrease of 1.8% and a month - on - month decrease of 19.4% [13]. - Russia expects to increase its oil production to 10.8 million barrels per day in the future, and the share of OPEC+ countries in the global oil market will increase from 49% to 52% by 2050 [13]. Group 4: Outlook - Coke: Downstream steel mills' production is hovering at a high level. Coking plants' production decreased slightly after seven weeks of increase, with obvious inventory reduction. Steel mills' inventory increased slightly from a low level, and port inventory decreased for three consecutive weeks. The coke price rebound needs the cooperation of the finished product market. It is expected that the coke market may improve further in mid - May [10]. - Coking Coal: In March, imports increased from the high level in previous months but with a smaller increase. The domestic coal industry emphasizes supply security. Although the output and operating rate of coal washing plants are lower than those in the fourth quarter of last year, the supply is still abundant. Port inventory reduction is positive, but steel mills' inventory decreased slightly and even increased recently, and coking plants reduced inventory again after three weeks of restocking. The obvious resumption of production in coking plants is beneficial for the stabilization of coking coal prices, but it depends on the improvement of the entire steel industry chain [10]. - It is expected that the coke and coking coal markets will stabilize and rebound after the second bottom - testing of steel futures prices in mid - to late May. One can try to sell put options at high prices or buy the far - month 2509 contracts for hedging or investment when the technical and fundamental aspects resonate [10]. Group 5: Data Overview - The report provides figures on the spot price index of metallurgical coke, the spot price of main coking coal, the production and capacity utilization rate of coking plants and steel mills, the daily average pig iron output, the inventory of coke and coking coal in ports, steel mills, and coking plants, the profit per ton of independent coking plants, the output and operating rate of coal washing plants, the inventory of raw coal and clean coal in coal washing plants, and the basis of coke and coking coal contracts [15][18][23][26][34]

Investment Rating - The report maintains an "Overweight" rating for the industry [4] Core Insights - The modern coal chemical industry is experiencing a development opportunity period, driven by industrial upgrades and energy security [10] - Xinjiang is emerging as a strong coal chemical base due to its abundant resources, favorable policies, and significant investment in coal chemical projects [10][28] - The report identifies three major investment directions within the coal chemical industry: equipment providers, project owners, and service providers [9][10] Summary by Sections 1. Modern Coal Chemical Industry Development - Modern coal chemical processes produce alternative petrochemical products and clean fuels, including coal-to-olefins and coal-to-oil [17] - The industry is essential for ensuring national energy security, given China's reliance on coal as a primary energy source [22][26] 2. Xinjiang's Coal Chemical Industry - Xinjiang has rich coal reserves, with a total resource of 2.19 trillion tons, accounting for about 40% of the national total [28] - The region's coal quality is high, primarily consisting of low-sulfur and high-calorific value coal types, making it suitable for large-scale coal chemical projects [33] - Favorable national policies have positioned Xinjiang as a key coal chemical base, with over 800 billion yuan in planned investments for various coal chemical projects [45] 3. Economic Competitiveness - Xinjiang's coal-to-gas production costs are significantly lower than those in Inner Mongolia and Shaanxi, with costs estimated at 1.28 yuan per cubic meter compared to 2.06 yuan and 2.68 yuan, respectively [53] - The report highlights the cost advantages of Xinjiang's coal resources, with pithead prices for coal being substantially lower than in other regions [34][53] 4. Investment Opportunities - Recommended companies for investment include those involved in engineering design, total contracting, and equipment supply, such as Sandi Chemical, China National Chemical, and Donghua Technology [9] - Project owners benefiting from Xinjiang's cost advantages include Baofeng Energy and Guanghui Energy [9] - Service providers in the coal chemical sector, such as Guangdong Hongda and Xuefeng Technology, are also highlighted as potential investment opportunities [9]

Core Viewpoint - The coal chemical industry in China is characterized by a diverse range of listed companies, each with distinct business layouts and performance metrics, focusing on both traditional and modern coal chemical products [1][3][20]. Industry Overview - The coal chemical industry is supported by upstream coal mining companies, which provide raw materials, and is influenced by coal price fluctuations that affect production costs and profit margins [1]. - The industry is divided into traditional coal chemical (e.g., coal-based fertilizers, synthetic ammonia) and modern coal chemical (e.g., new coal-based energy and materials) [1]. Key Listed Companies - Major listed companies in the coal chemical sector include China Shenhua (601088), Yanzhou Coal (600188), Baofeng Energy (600989), and others, with varying degrees of involvement in the coal chemical value chain [1][3][4]. - China Shenhua is recognized as a global leader in coal-based comprehensive energy [3]. Financial Performance - In the first half of 2024, China Shenhua reported revenues of 1680.78 billion, while other companies like Yanzhou Coal and Baofeng Energy reported revenues of 723.12 billion and 168.97 billion respectively [4][5]. - The overall gross profit margins in the coal chemical sector vary significantly, with Baofeng Energy achieving a gross margin exceeding 40% [19]. Business Layout and Strategy - Companies are strategically located in resource-rich regions, primarily in North and East China, focusing on traditional coal chemical products while expanding into modern coal chemical sectors [16][18]. - Business strategies emphasize safety, environmental protection, energy efficiency, and technological advancement to align with national policies and market demands [20][21]. Employee Composition - China Shenhua has the largest workforce in the sector, employing approximately 83,400 individuals, including 11,400 technical staff [11]. Future Planning - Companies are focusing on high-quality development, with plans to enhance core competencies, ensure energy security, and promote green and sustainable practices [21][22].

Investment Rating - The report maintains a "Buy" recommendation for the coal-to-oil and coal-to-gas sectors in Xinjiang, highlighting their potential for significant growth and investment opportunities [2]. Core Insights - Xinjiang is emerging as a strategic base for coal-to-oil and coal-to-gas projects, driven by the increasing importance of energy security and favorable local coal prices [12][18]. - The report emphasizes the economic viability of coal-to-oil projects in Xinjiang, particularly due to the high oil content of Hami coal and advancements in technology that reduce production costs [18][22]. - The coal-to-gas sector is also highlighted for its improved profitability due to technological advancements and changes in commercial models, which enhance operational stability and market access [6][20]. Summary by Sections 1. Xinjiang as a Core Development Base for Coal-to-Oil and Coal-to-Gas - The report discusses the acceleration of coal-to-oil and coal-to-gas construction in Xinjiang, emphasizing the region's role in enhancing national energy security and reducing reliance on energy imports [12][13]. 2. Coal-to-Oil: Economic Viability and Technological Advancements - The report details the current state of coal-to-oil projects, noting that the average oil yield from Hami coal is significantly higher than that from other regions, with a total resource estimate of 570.8 billion tons and proven oil-rich coal resources of 64 billion tons [18][22]. - It highlights the ongoing technological improvements that have led to a decrease in production costs, with a breakeven point for indirect coal-to-oil at approximately $40 per barrel under favorable coal price conditions [18][22]. 3. Coal-to-Gas: Enhanced Profitability and Infrastructure Development - The report outlines the advancements in coal-to-gas technology and the establishment of a more competitive commercial model, which allows coal-to-gas companies to choose buyers freely, thus improving profitability [20][22]. - It mentions the completion of key infrastructure projects, such as the West-to-East Gas Pipeline, which enhances the transportation capacity for coal-to-gas products [20][22]. 4. Investment Recommendations - The report suggests focusing on three main investment lines: 1. Companies benefiting from capital expenditures in Xinjiang's coal chemical sector, including design and equipment firms [7]. 2. Service providers for coal chemical operations and mining, such as logistics and mining service companies [7]. 3. Companies investing in Xinjiang to leverage low coal prices for long-term cost advantages [7].