Core Viewpoint - In August, coal prices experienced an unexpected surge due to a temporary supply-demand imbalance, with thermal coal showing a significant upward trend for most of the month, while coking coal prices saw a decline towards the end of the month due to seasonal factors [1][3]. Supply and Demand - From January to August 2025, the cumulative output of raw coal reached 3.165 billion tons, a year-on-year increase of 2.8%, but the growth rate is declining. In August alone, the output was 391 million tons, down 3.2% year-on-year but up 2.5% month-on-month [2]. - Terminal demand in the first eight months of 2025 was supported by manufacturing and infrastructure, with electricity demand improving. Fixed asset investment increased by 0.5% year-on-year, with manufacturing investment up 5.1% and infrastructure investment up 2.0%, while real estate investment fell by 12.9% [2]. - In August, coal imports increased month-on-month, but the cumulative import volume from January to August 2025 was 300 million tons, down 12.2% year-on-year. The August import volume was 42.737 million tons, down 6.78% year-on-year but up 20.02% month-on-month [2]. Price Trends - Coal prices rebounded unexpectedly in August, with coking coal showing a larger increase. Despite adjustments in the average prices of Shanxi premium mixed 5500 thermal coal, Beijing-Tangshan main coking coal, and Tianjin second-grade metallurgical coke since the beginning of 2025, all three varieties saw different degrees of rebound in August [2][3]. Investment Recommendations - With the policy shift driven by anti-involution, short-term market risk appetite has increased, favoring elastic stocks. For thermal coal, the removal of long-term contract price inversion is expected to improve the production-sales ratio and inventory issues in the third quarter. Companies to watch include Huayang Co., Jinkong Coal Industry, and Shanmei International [4]. - For coking coal, the demand expectations for September and October are positive, and if there are supply disruptions, prices may rebound. Companies to focus on include Lu'an Energy and Shanxi Coking Coal [4].

Market Overview - In August 2025, the domestic retail sales (社零) totaled 3.97 trillion yuan, with a year-on-year growth of 3.4%, slightly below market expectations of 3.82% [6][5] - For the first eight months of 2025, total retail sales reached 32.39 trillion yuan, reflecting a year-on-year increase of 4.6% [6] - The consumer confidence index in July 2025 was reported at 89.0, showing a month-on-month increase of 1.1 [6] Retail Sector Insights - Online retail channels continued to outperform the overall retail market, with physical stores like convenience stores and supermarkets showing stable performance [6] - In August 2025, the year-on-year growth for cosmetics was 5.1%, while gold and silver jewelry saw a significant increase of 16.8% [6] - The sports and entertainment goods sector maintained rapid growth, with a year-on-year increase of 16.9% in August [6] Textile and Apparel Sector - The textile and apparel retail sales in August 2025 showed marginal improvement, with a cumulative year-on-year growth of 2.9% for the first eight months [7] - The sports apparel segment experienced a robust growth rate of 20.6% year-on-year for the same period [7] - Major brands like 361 Degrees reported double-digit growth, while other brands like Li Ning and Anta showed low to mid-single-digit growth [7] Coal Industry Analysis - In August 2025, coal supply showed a marginal decrease, with cumulative production of 3.165 billion tons for the first eight months, reflecting a year-on-year increase of 2.8% [10] - The demand for coal was supported by manufacturing and infrastructure investments, with fixed asset investment growing by 0.5% [10] - Coal prices experienced an unexpected rebound in August, driven by supply-demand tensions, with significant increases in both coking coal and thermal coal prices [11] Investment Recommendations - For the textile manufacturing sector, companies like Shenzhou International and Kairun Co. are recommended due to their strong performance outlook [9] - In the gold and jewelry retail sector, companies such as Laopuyin and Chaohongji are recommended, with expectations of sustained demand due to rising gold prices [9] - The coal sector suggests focusing on companies like Huayang Co. and Jinkong Coal Industry, anticipating improvements in production and sales ratios in the upcoming quarters [11]

Investment Rating - The report maintains an investment rating of "Leading the Market" for the coal industry, indicating an expected performance that exceeds the benchmark index by more than 10% [1][31]. Core Insights - The coal supply has been marginally decreasing from January to August 2025, with a cumulative production of 3.165 billion tons, reflecting a year-on-year increase of 2.8%, but with a declining growth rate [4]. - In August 2025, coal prices experienced an unexpected surge due to supply-demand tensions, with significant increases in various coal types, particularly in thermal coal [6][7]. - The report highlights that domestic coal supply continues to contract, which has led to an increase in coal imports, with August imports rising by 20.02% month-on-month, despite a year-on-year decline of 6.78% [5][7]. Summary by Sections Supply and Demand - From January to August 2025, the cumulative coal supply showed a marginal decrease, with August production at 391 million tons, down 3.2% year-on-year but up 2.5% month-on-month [4]. - The report notes that terminal demand has been supported by manufacturing and infrastructure investments, with fixed asset investment increasing by 0.5% year-on-year [5]. Price Trends - August saw a significant rebound in coal prices, with various types of coal experiencing different degrees of price increases, particularly in coking coal [6][7]. - The report indicates that the price of thermal coal rose unexpectedly, with the peak occurring later than traditional peak seasons [7]. Investment Recommendations - The report suggests that with the policy shift due to reduced internal competition, there is an improved market risk appetite, making certain stocks more attractive. Key stocks to watch include Huayang Co., Jinkong Coal Industry, and Shanmei International for thermal coal, and Luanan Energy and Shanxi Coking Coal for coking coal [7].

Investment Rating - The report maintains an "Accumulate" rating for the coal mining industry [7]. Core Viewpoints - Recent developments in Indonesia, including large-scale protests, may impact coal production and exports, as Indonesia accounts for 9% of global coal production and 29.8% of global coal trade [2]. - The report highlights a decrease in domestic coal prices, with Qinhuangdao port's average price at 695 RMB/ton, down 1.14% week-on-week [3]. - Coal mine operating rates have declined, with power coal mines at 89.4% and coking coal mines at 84.0% [4]. - The report suggests that recent policies aimed at reducing overproduction may improve long-term coal price expectations, recommending investments in specific coal stocks [5]. Summary by Sections 1. Market Overview - Indonesia's coal production for 2024 is projected at 840 million tons, with exports at 540 million tons [2]. - Domestic coal prices have seen a decline, with notable decreases in both Qinhuangdao and Shaanxi regions [3]. 2. Production and Utilization - The capacity utilization rate for power coal mines is 89.4%, down 2.72 percentage points week-on-week, while coking coal mines are at 84.0%, down 1.37 percentage points [4]. - Daily average pig iron production is reported at 2.4006 million tons, reflecting an 8.7% year-on-year increase [4]. 3. Inventory Levels - Qinhuangdao port coal inventory has increased to 6.1 million tons, up 4.27% week-on-week, while the inventory in the Bohai Rim ports is at 23 million tons, down 1.18% [4]. 4. Investment Recommendations - The report recommends stocks such as China Shenhua, China Coal Energy, and Shaanxi Coal and Chemical Industry, highlighting the potential for significant valuation and profit increases [5].

Report Investment Rating No investment rating for the industry is provided in the report. Core Viewpoints - The steel market sentiment has slowed down, and steel prices are oscillating. Although steel inventories are decreasing and export resilience is strong, the impact of high tariffs on the US cannot be ignored, and future supply - side policies and Sino - US talks need attention [1]. - The iron ore market is weak and falling. Supply is increasing while demand is decreasing, but iron ore prices are still firm in the short - term. In the long - run, the supply - demand pattern is relatively loose, and attention should be paid to the off - season demand and inventory changes [3]. - The demand side of coking coal and coke is weak, and prices are oscillating. Coking coal inventory is high and demand is weak, and the price center of coking coal and coke is expected to remain low [5][6]. - The procurement enthusiasm for thermal coal has improved, and the price in the production area is oscillating. In the short - term, price support is insufficient, and in the long - term, the supply is loose, and non - power coal consumption and restocking need attention [7]. Summary by Commodity Steel - **Market Analysis**: The futures trading atmosphere of rebar and hot - rolled coils is light, and the spot market transactions are average. The overall steel inventory is decreasing, and the low raw material prices make the steel mill profits acceptable. However, as the off - season approaches, building material consumption may decline, while plate demand remains resilient. The low domestic prices support export resilience, but the impact of high tariffs on the US still exists [1]. - **Strategy**: No trading strategies are provided for single - side, inter - period, inter - variety, spot - futures, and options trading [2]. Iron Ore - **Market Analysis**: The futures price of iron ore is weakly falling, and the spot price has a slight decline. The global iron ore shipment has increased slightly, and the arrival at 45 ports has increased by 2.9% to 2609 tons. On the previous day, the total transaction volume at major ports was 85000 tons, a 14.4% increase. In the long - term, the supply - demand pattern is relatively loose, and steel mills have a production - cut expectation [3]. - **Strategy**: Pay attention to the opportunity of selling hedging after the price rebounds [4]. Coking Coal and Coke - **Market Analysis**: The futures of coking coal and coke are oscillating. Some coking plants' production has declined due to environmental protection, and some coal mines have reduced production, providing some support. The port spot price of coking coal is weakly stable, and the terminal procurement is mainly for on - demand restocking. The import price of Mongolian coal is weak, and the port inventory is accumulating [5][6]. - **Strategy**: Coking coal is expected to oscillate, and coke is expected to oscillate weakly [6]. Thermal Coal - **Market Analysis**: The pit - mouth coal price in the production area is oscillating. Environmental protection has affected some coal mines and coal - washing plants in Ordos. Chemical and other industries maintain rigid demand procurement, and the procurement demand is acceptable. The port market is weakly stable, and the port inventory is decreasing. As the rainy season arrives, the possibility of large - scale thermal power procurement is small [7]. - **Strategy**: No trading strategies are provided [7].

Group 1 - Global thermal coal prices have dropped to a four-and-a-half-year low, now only one-fourth of the peak during the 2022 energy crisis, due to oversupply and inventory surges, particularly from record-high domestic coal production in China and increased inventories in India [1] - Analysts warn that further declines in coal prices may still be ahead, as the current supply-demand balance is loose, primarily due to weak demand expectations from high coal-consuming sectors like real estate and infrastructure [1] - However, rising temperatures may lead to increased coal demand, and with recent reductions in domestic coal production enthusiasm and a shift from increasing to decreasing coal imports, coal prices may find new support [1] Group 2 - The domestic economy is currently weak, and with the U.S. in a rate-cutting cycle and domestic interest rates also declining, coal remains a stable investment option, particularly for insurance funds that have begun new allocation periods [2] - Following the March Two Sessions, both thermal and coking coal prices are at low levels, and with ongoing improvements in supply-demand fundamentals, both types of coal are expected to stabilize and rebound [2] - The macroeconomic policies have shown significant strength, and the market anticipates real effects on demand following policy implementation, with coal demand and prices expected to trend upwards after the 2025 Two Sessions and the arrival of the spring construction season [2] Group 3 - Related Hong Kong-listed coal companies include Yanzhou Coal Mining Company (01171), China Coal Energy Company (01898), China Shenhua Energy Company (01088), and Yancoal Australia (03668) [3]

Investment Rating - The report maintains a "Synchronize with the Market" rating for the coal industry [1][5][42] Core Viewpoints - The coal supply growth rate has slowed down, with a cumulative production of 1.585 billion tons from January to April 2025, reflecting a year-on-year increase of 6.6%, but the growth rate is declining [3][13] - Demand is supported by infrastructure investment, with fixed asset investment increasing by 4.0% year-on-year in the same period, while the real estate sector continues to show negative growth [4][17] - Coal imports have shown a negative growth trend, with a cumulative import volume of 15.267 million tons from January to April 2025, down 5.3% year-on-year [24] - Coal prices, particularly for thermal and coking coal, have been under pressure, with prices for Shanxi premium mixed 5500 thermal coal decreasing since the beginning of 2025 [26][38] Summary by Sections Supply Side - The growth rate of raw coal supply has significantly decreased, with April's production at 389 million tons, a year-on-year increase of 3.8%, marking a substantial decline from the previous month [3][13] Demand Side - The terminal demand from January to April 2025 is supported by infrastructure, with non-electric demand performing better than electric demand. The cumulative growth rate for thermal power is -4.1%, while coking coal and pig iron show positive growth [4][20] Import Coal - The coal import growth rate remains negative, with April's imports at 3.783 million tons, down 16.4% year-on-year [24] Price and Profit Performance - Coal prices have been under pressure, with the average price of Shanxi premium mixed 5500 thermal coal decreasing since the start of 2025 [26][38] Investment Recommendations - The report suggests focusing on undervalued companies with strong performance support, particularly those with a small proportion of non-coal business such as Xinjie Energy and Huahua Energy, as well as those with a large proportion like Shaanxi Energy and Electric Power Investment Energy [5][38]

Investment Rating - The report maintains an "Accumulate" rating for the coal mining sector, indicating a positive outlook for the industry in the near term [5]. Core Insights - Non-electric demand for coal remains high, with a focus on the recovery of thermal coal demand during the peak season. The average daily pig iron output from 247 blast furnaces reached 2.4442 million tons, up 1.8% week-on-week and 6.8% year-on-year, marking the highest level for the same period in the past five years [1]. - Cement clinker capacity utilization is at 58.2%, up 9.6 percentage points year-on-year, significantly higher than the same period last year [1]. - The Ministry of Finance has arranged for a total of 1.3 trillion yuan in ultra-long special bonds this year, an increase of 300 billion yuan compared to 2024, with 800 billion yuan allocated for greater support of "two heavy" projects, suggesting that infrastructure investment growth will remain high, supporting non-electric coal demand [1]. Summary by Sections Coal Price Trends - The average closing price of thermal coal at Qinhuangdao Port (5500 kcal weekly average) was 658 yuan/ton, down 6 yuan/ton (-0.90%) week-on-week [2]. - The average price of mixed thermal coal at the pit in Yulin, Shaanxi (5800 kcal) was 521 yuan/ton, down 11 yuan/ton (-2.07%) week-on-week [2]. - The FOB price of thermal coal in Newcastle, Australia (5500 kcal weekly average) was 71 USD/ton, up 0.11% week-on-week [2]. Production and Utilization Rates - The operating rate of 110 sample coal washing plants (approximately 50% of national washing capacity) was 63.0%, up 1.1 percentage points week-on-week but down 4.1 percentage points year-on-year, remaining at a low level for the same period in five years [3]. - The capacity utilization rate of 247 blast furnaces was 91.60%, up 1.45 percentage points week-on-week and 6.07 percentage points year-on-year [3]. Inventory Levels - As of April 25, coal inventory at Qinhuangdao Port was 6.89 million tons, up 0.58% week-on-week and up 35.63% year-on-year, remaining at a high level for the same period [4]. - The total coal inventory at ports in the Bohai Rim was 31.099 million tons, down 2.66% week-on-week but up 32.63% year-on-year [4]. Investment Recommendations - Given the recent significant declines in oil and gas prices, coal prices have shown resilience. The report suggests that the further downside for port thermal coal prices is limited, considering that the current port spot prices are below long-term contract prices. It is recommended to adopt a defensive approach towards the sector, favoring companies with high long-term contract ratios and stable profitability, such as China Shenhua and China Coal Energy [4].