Investment Rating - The report maintains a "Positive" outlook on the coal industry, indicating an expectation for the sector to outperform the overall market performance [3]. Core Insights - The report highlights that the coal market is experiencing short-term price fluctuations due to supply constraints caused by heavy rainfall and production checks in key mining areas. It anticipates that coal prices will stabilize as temperatures drop across most regions [3]. - The report provides specific price data for thermal coal and coking coal, noting that while some thermal coal prices have decreased, others have seen slight increases. The overall trend suggests a mixed but stable pricing environment [3][10][12]. - The report emphasizes the importance of supply and demand dynamics, with increased daily coal inflow and outflow at the ports, leading to a decrease in coal inventory levels [21]. Summary by Sections Recent Industry Policies and Developments - The report discusses recent developments in coal mining projects and safety initiatives, including approvals for increased production capacities in certain regions [9]. Price Trends - Thermal coal prices have shown mixed results, with some prices remaining stable while others have increased slightly. Coking coal prices are expected to experience minor fluctuations before potentially rising again due to seasonal demand [10][12]. International Oil Prices - The report notes an increase in Brent crude oil prices, which may influence coal pricing dynamics. The relationship between international oil prices and coal prices is highlighted, with a noted increase in the ratio of oil to coal prices [17]. Port Inventory and Shipping Costs - The report indicates a decrease in coal inventory at the ports, with increased daily inflow and outflow rates. Shipping costs for domestic routes have also risen slightly, reflecting broader market trends [21][27]. Company Valuation - The report includes a valuation table for key companies in the coal sector, providing insights into their market performance and earnings projections. Companies such as China Shenhua and Shaanxi Coal are highlighted for their stable operations and high dividend yields [33].

Group 1 - The market's expectation for short-term coal price increases shows no significant differences, but the divergence lies in the price trends during the off-season, which will impact next year's long-term contract negotiations [1] - Even without the supply shock from the current "overproduction crackdown," coal consumption is expected to increase, leading to a tightening of the supply-demand balance by 110 million tons in Q3 2025 compared to Q2 2025 [1] - The marginal tightening in Q3 2025 is estimated to be between 120 million to 160 million tons, providing support for a sustained rebound in coal prices [1] Group 2 - Based on the sensitivity analysis of leading companies' profitability, Q2 2025 may mark the performance bottom for major coal enterprises [1]

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core Viewpoint Market speculation sentiment has cooled, and coal prices are gradually returning to rationality. However, short - term fundamental improvements support coal prices to run strongly, and price fluctuations remain intense. It is recommended to participate with caution [2][3]. 3. Summary by Relevant Contents Market Performance - Yesterday, coal and coke futures prices fluctuated strongly, with increased intraday volatility. Coking coal spot prices remained strong, and coke prices were stable after the fifth round of price hikes [2]. Supply - Side Situation - In response to over - production issues, Shanxi's verification of coal mine over - production is being deepened. Many coal mines have voluntarily reduced production, and with the approaching September parade and strict safety supervision, short - term coal mine production increases are limited [2]. - This week, the daily output of raw coal from 523 coking coal sample mines was 1.883 million tons, a decrease of 53,000 tons compared to the previous week. Among them, the daily output of raw coal in Shanxi was 1.059 million tons, a decrease of 38,000 tons compared to the previous week [2]. Inventory Situation - The structural inventory pressure has been significantly alleviated. The raw coal inventory of 523 coal mines is 476500 tons, a decrease of 224500 tons from the high in June; the clean coal inventory is 245700 tons, a decrease of 254300 tons from the high in June [3]. Demand - Side Situation - Last week, coking plants and steel mills slowed down their raw material replenishment. The available days of coking coal inventory in factories stabilized after rising from a low level. Currently, steel mills have a good profit margin, production remains at a relatively high level, and the daily average pig iron output is over 2.4 million tons, supporting raw material demand [3]. Later Concerns - Pay attention to changes in steel mill blast furnace starts and coal mine resumption of production [3]

Group 1: Report Industry Investment Rating - No relevant content Group 2: Core View of the Report - Market speculation sentiment has cooled, coal prices are gradually returning to rationality, but short - term fundamental improvements support coal prices to run strongly, and price fluctuations remain severe. It is recommended to participate with caution [4] Group 3: Summary According to the Report Market Performance - Yesterday, the prices of coal and coke futures fluctuated strongly, with intensified intraday fluctuations. The spot market price performance lagged behind the futures, maintaining a strong operation, and the fifth round of coke price increase was fully implemented [3] Supply Side - Regarding the tracking of over - production issues, last week, regions in Shanxi except Lvliang received documents and started to verify production. The document may not cause an obvious reduction in short - term coking coal production, but the medium - and long - term impact on coal mine production should be noted. Recently, some coal mines have faced suspension for rectification and fines due to their 2024 raw coal output exceeding the approved capacity by 33%. With the approaching September military parade, the safety supervision situation is severe, and it is expected that the short - term coal mine increment is limited [3] Inventory Status - The structural inventory pressure has been significantly alleviated. Currently, the raw coal inventory of 523 coal mines is 4.83 million tons, a decrease of 2.18 million tons from the high point in June; the clean coal inventory is 2.48 million tons, a decrease of 2.52 million tons from the high point in June [4] Demand Side - Last week, the raw material replenishment actions of coking plants and steel mills slowed down. The available days of coking coal inventory in the plants stabilized after rising from a low level. Currently, the profitability rate of steel mills is acceptable, production remains at a relatively high level, and the daily average pig iron output is over 2.4 million tons, which supports the demand for raw materials [4] Future Focus - Pay attention to changes in the blast furnace start - up of steel mills and the resumption of coal mine production [4]

Market Overview - The three major indices opened mixed, with the Shanghai Composite Index down 0.06% and the Shenzhen Component Index down 0.16%, while the ChiNext Index opened slightly up by 0.01% [1] - The Shanghai Composite Index is at 3595.81, with a decline of 0.06%, and the Shenzhen Component Index is at 11199.63, down 0.16% [2] - The NASDAQ China Golden Dragon Index fell by 0.69%, with most popular Chinese concept stocks experiencing declines [3] Sector Insights - Huatai Securities is optimistic about the improvement in demand for infant formula due to the acceleration of fertility stimulus policies across the country, which is expected to boost consumer confidence and maternal and infant demand [4] - CITIC Construction Investment predicts that cobalt prices are likely to rise in the short term due to a significant decrease in imports of cobalt intermediates in June and expected continued declines in July, supported by downstream consumption and inventory digestion [5] - CICC forecasts a rebound in coal prices in the second half of the year, driven by rational supply release and marginal demand improvement, which may aid in industry profit recovery [6] - China Galaxy Securities indicates that positive factors for banks are accumulating, with a potential turning point in performance as undervalued banks attract more active funds and benefit from the expansion of ETF quality [7]

Investment Rating - The coal industry is rated as "Overweight" indicating an expectation for the industry to outperform the overall market [3][29]. Core Views - The report anticipates a recovery in coal companies' performance in the second half of 2025, driven by a rebound in coal prices after a bottoming out in the second quarter [3]. - Domestic raw coal production increased by 5.4% year-on-year in the first half of 2025, while coal imports decreased by 11.1% [3][13]. - The average price of thermal coal and coking coal at ports fell significantly in the second quarter of 2025, with thermal coal prices dropping approximately 25.79% year-on-year [3][17]. Supply and Demand Analysis - Domestic raw coal production reached 2.405 billion tons in the first half of 2025, up from 2.266 billion tons in the same period of 2024, with notable increases in Shanxi (10.1%) and Xinjiang (12.4%) [8][9]. - Coal imports totaled 22.2 million tons in the first half of 2025, marking an 11.1% decline compared to the previous year, with negative growth observed since March 2025 [13][18]. - The average price of 5500 kcal thermal coal at ports was approximately 630 CNY/ton in Q2 2025, down from 850 CNY/ton in Q2 2024, reflecting a significant price drop [3][17]. Company Performance Forecast - Companies expected to exceed performance expectations include China Shenhua (EPS 1.24, YOY -16.62%), Electric Power Investment (EPS 1.36, YOY 3.49%), and Xinji Energy (EPS 0.38, YOY -15.78%) [3][20]. - Companies with performance in line with expectations include Shaanxi Coal (EPS 0.86, YOY -21.1%) and Yanzhou Coal (EPS 0.54, YOY -47.24%) [3][20]. - The only company expected to underperform is Shanxi Black Cat (EPS -0.25, YOY -14.61%) [3][20]. Investment Recommendations - The report recommends focusing on stable, high-dividend stocks such as China Shenhua, Shaanxi Coal, and China Coal Energy [3]. - It also suggests considering undervalued stocks with potential for growth, including Shanxi Coking Coal, Huabei Mining, Electric Power Investment, Yanzhou Coal, and Pingmei Shenma [3]. - Attention is drawn to Xinji Energy as a growth stock benefiting from coal-electricity integration [3].

Group 1 - The coal industry maintains stable supply and demand, with seasonal demand increase driven by summer electricity peak [1] - The price of thermal coal at Qinhuangdao port increased by 1.06% week-on-week to 628 RMB/ton, while overseas natural gas prices rose by 3.35% [1] - The capacity utilization rate of 247 blast furnaces is at 89.90%, supporting an average daily pig iron output of 2.4079 million tons, indicating resilient downstream demand [1] Group 2 - Port inventories are at high levels, with Qinhuangdao port holding 5.6 million tons and the Bohai Rim ports holding 26.89 million tons [1] - The National Coal Trading Conference on July 10 emphasized the importance of fulfilling long-term contracts for thermal coal and maintaining supply-demand balance [1] - The China Electricity Council forecasts a 5%-6% year-on-year growth in total electricity consumption by 2025, indicating overall balance in power supply and demand [1] Group 3 - The coal ETF tracks the China Securities Coal Index, which reflects the overall performance of listed companies in the coal mining and coal chemical sectors [1] - The index includes leading companies in the coal industry, providing high industry representativeness [1]

Group 1: Market Overview - On Tuesday, coking coal futures experienced a rebound after a decline due to falling crude oil prices, with coking coal main contract rising 0.75% to 804.5 CNY/ton and coke main contract increasing 1.46% to 1387.5 CNY/ton [1] - The import volume of Mongolian coking coal has become a significant factor in port inventory reduction, with current port inventory around 3 million tons, which has increased to 4 million tons after the restoration of customs clearance [1][2] - The overall supply of coking coal remains loose, with no significant improvement in the supply-demand fundamentals despite a decrease in import volumes [2][3] Group 2: Supply and Demand Dynamics - Steel mills' daily molten iron production has stabilized around 2.42 million tons, with a profitability rate of approximately 58%, but high molten iron levels have not effectively reduced coking coal inventory [2] - The demand for coking coal is expected to remain weak, with the fourth round of coke price reductions leading to a drop of 240-250 CNY/ton [2][3] - The coal market is anticipated to see an increase in supply exceeding demand in early July, potentially stabilizing coal prices if extreme weather does not occur [4] Group 3: Future Price Trends - The market sentiment remains cautious, with the price support for coking coal relatively weak due to the ongoing loose supply conditions [3][6] - The recent geopolitical tensions have subsided, leading to a significant drop in crude oil futures, which may influence energy prices [7] - The coking coal market is expected to maintain a wide range of fluctuations in the near term due to mixed market factors and ongoing supply pressures [6][7]

Group 1: Copper Industry - In May, domestic air conditioner sales increased by 2.3%, while production decreased by 1.8%. The copper industry is facing supply disruptions, with both domestic production and imports of scrap copper declining in May. Demand for air conditioning is weaker than expected, leading to potential risks in copper demand. Short-term copper prices are expected to remain volatile, with a gradual increase anticipated following domestic stimulus policies and potential interest rate cuts in the US [4]. Group 2: Oil and Gas Industry - The ongoing military conflict between Israel and Iran continues to dominate the crude oil market. On June 22, the US bombed Iranian nuclear facilities, marking its formal involvement in the Israel-Iran conflict. Despite geopolitical uncertainties, the medium to long-term supply-demand dynamics for crude oil remain favorable, with a continued positive outlook for major oil companies and related services [5]. Group 3: Agriculture and Animal Husbandry - The "618" shopping festival results indicate a significant growth in the pet economy, with over 400 pet brands reporting sales increases of over 100% year-on-year. The number of pet transaction users grew by 32%, and new pet owners increased by 39% [6]. Group 4: Coal Industry - The coal market is experiencing a supply contraction and a rebound in demand, suggesting that coal prices may have reached a temporary bottom. Port coal prices are stable, and there has been an increase in iron and steel production. Coal inventories at Qinhuangdao Port have decreased and are now lower than the same period last year [8]. Group 5: Renewable Energy and Environmental Protection - The wind power sector is advised to focus on wind turbine manufacturers, as second-quarter performance may be under pressure. The solid-state battery sector is seeing increased capital expenditure due to advancements in production lines and policy support. The photovoltaic sector is expected to benefit from upcoming supply and demand policies, with a focus on integrated companies with lower production costs [9]. Group 6: Retail Industry - The recent promotional period concluded with stable results, as e-commerce platforms reported a cumulative sales figure of 855.6 billion yuan, reflecting a 15.2% year-on-year increase. Instant retail sales reached 29.6 billion yuan, up 18.7% year-on-year. This year, platforms are focusing more on ecosystem building and consumer experience, with instant retail gaining traction [10]. Group 7: Pharmaceutical Industry - The review process for innovative drugs is accelerating, with the National Medical Products Administration seeking opinions on optimizing clinical trial approvals. This is expected to enhance the value of quality pipelines and improve market sentiment towards the innovative drug sector. Long-term, the policy aims to support the transition of Chinese innovative drugs from a combination of imitation and innovation to global original research [11].

Group 1 - The domestic coal production in China is expected to remain high in May, with domestic coal prices experiencing significant adjustments, leading to a loss of cost competitiveness for some domestic and foreign supply [1] - The narrowing price advantage of imported coal has prompted some end-users to shift towards purchasing domestic coal, providing certain support to port coal prices [1] - The market has been in a "high supply + high inventory + weak demand" situation for nearly six months, indicating a sensitivity to positive factors [1] Group 2 - There is a potential for a slight increase in coal prices towards the end of May and early June, driven by traders speculating on power plants' demand for replenishing stocks during the summer peak [1] - Despite the potential price increase, the overall inventory levels remain high compared to the previous year, suggesting that any price rise will be limited and short-lived [1]