Investment Rating - The report maintains a "stronger than the market" rating for the coal industry, indicating an expected increase in performance relative to the benchmark index [2][15]. Core Insights - The coal production in the first two months of the year continued to show negative growth, with a total output of 763 million tons, down 0.3% year-on-year. Key producing regions such as Shanxi, Inner Mongolia, Shaanxi, and Xinjiang accounted for 82.5% of the total output, with varying growth rates [1]. - Demand for coal has seen a mixed performance, with electricity generation and cement production increasing by 3.3% and 6.8% respectively, while pig iron production decreased by 2.7% [1]. - The Australian government has announced a ban on new coal mine approvals to achieve net-zero emissions, while Indonesia plans to increase its coal production quota for 2026 to capitalize on rising global prices [1]. - Despite a weak demand from power plants, coal prices have shown resilience, with Qinhuangdao coal prices rising to 731 RMB/ton, reflecting an increase of 58 RMB/ton year-on-year [1]. - The report highlights that the profitability of coking coal is supported by high prices of chemical products, leading to increased production activity among coking enterprises [9]. Summary by Sections Production and Demand - National raw coal production for January-February was 763 million tons, with a year-on-year decrease of 0.3%. Key regions showed varied performance, with Shanxi down 2%, Inner Mongolia up 0.9%, Shaanxi up 6.2%, and Xinjiang down 4.3% [1]. - Coking coal production in the same period was 82.55 million tons, up 1.1% year-on-year, indicating a slight recovery in the sector [9]. Price Trends - As of March 20, coal prices have fluctuated, with Qinhuangdao coal prices reaching 731 RMB/ton, showing a year-on-year increase of 8.6% [1]. - Coking coal prices at Jingtang Port rose to 1620 RMB/ton, reflecting a significant increase of 17.4% year-on-year [9]. Market Dynamics - The report notes that while electricity demand is relatively weak, speculative demand from end-users and the need for inventory replenishment have supported coal prices [1]. - The report suggests that the coal market may experience a "not-so-dull" off-season due to ongoing overseas disruptions and domestic supply-side optimizations [10].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core View of the Report The report indicates that the supply - demand of thermal coal is becoming looser, leading to a price correction. In the short - term, the price is expected to be under pressure due to factors such as the entry into the traditional coal consumption off - season, reduced power plant restocking pressure, increased port inventories, and a weakening trading atmosphere [1][2]. 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Coal Prices**: The report provides price data for thermal coal from different origins and ports. For example, the price of Shanxi Datong 5500 is 613 yuan/ton, with a year - on - year increase of 55 yuan/ton; the price of Qinhuangdao Port's Shanxi - produced Q5500 is 743 yuan/ton, with a month - on - month decrease of 2 yuan/ton and a year - on - year increase of 62 yuan/ton. Overseas prices, such as the Indonesian FOB Q3800 at 59.8 dollars/ton, show a month - on - month decrease of 0.7 dollars/ton and a year - on - year increase of 8.8 dollars/ton [1]. - **3 - month Long - term Agreement Price**: It includes prices for different regions such as Shanxi Q5500 (519 yuan/ton, up 2 yuan/ton), Shaanxi Q5500 (462 yuan/ton, up 1 yuan/ton), and Mengxi Q5500 (433 yuan/ton, up 2 yuan/ton) [1]. 3.2 Trend Intensity The trend intensity of thermal coal (based on the spot price of thermal coal at Beigang) is - 1. It shows that the port thermal coal market is running weakly, and the short - term price is expected to be under pressure [2]. 3.3 Macro and Industry News - The port thermal coal market is running weakly on March 6. Entering the traditional coal consumption off - season, the civil load will gradually decline, the power plant restocking pressure is small, the supply in the production area is gradually recovering, the port inventory has increased significantly compared with last week, the market supply - demand pattern is becoming looser, the terminal's wait - and - see and slow - purchasing sentiment has increased, the trading atmosphere has weakened, and the quoted price has gradually loosened [2]. - Indonesia's Ministry of Energy and Mineral Resources has set the domestic market obligation (DMO) coal supply target for 2026 at 2.479 billion tons, slightly lower than the actual supply in 2025 (2.54 billion tons). The initial target for Indonesia's coal production in 2026 is 7.33 billion tons, subject to adjustment according to production reduction [2].

Investment Rating - The report maintains an "Outperform" rating for the coal industry, indicating an expected relative performance above the market index [2][13]. Core Insights - The report highlights that overseas supply disruptions, combined with domestic regulatory measures, are likely to support coal prices even during the off-peak season. It anticipates that coal prices may not decline as expected during this period [6][8]. - As of February 28, 2026, coal prices at Qinhuangdao port reached 745 RMB/ton, reflecting a year-on-year increase of 3.9% and a 7.3% increase compared to the previous year [6]. - The report emphasizes the importance of monitoring economic recovery and macro policies that could influence actual demand release, as well as the impact of safety regulations on production in major coal-producing regions [6]. Summary by Sections Supply and Demand Dynamics - The report notes that coal consumption in 2025 grew by 0.1%, with thermal power generation declining by 0.7%, accounting for 51.4% of total energy consumption, a decrease of 1.8 percentage points year-on-year [6]. - Indonesian coal production has faced delays due to regulatory approvals, leading to significantly low coal inventories at power plants, averaging only 10 days of supply, which is below the standard of 25 days [6]. Price Trends - The report indicates that coal prices have continued to rise post-holiday, with expectations that the off-peak season may not see a decline in prices due to ongoing overseas disruptions and stringent domestic safety regulations [6][8]. - The average daily coal consumption across 25 provinces was reported at 4.01 million tons, a decrease of 31.2% year-on-year, while average inventory levels increased by 8.3% [6]. Investment Recommendations - The report suggests actively positioning in coal sector opportunities, particularly in companies that are well-balanced in terms of risk and reward, such as Yancoal Energy, China Coal Energy, and Shenhua Group [8]. - It also highlights companies with relatively high profit elasticity in coking coal, including Mongol Mining and Shanxi Coking Coal, as well as those benefiting from coal capacity reserve policies and safety upgrades [8].

Investment Rating - The report provides a positive investment rating for the coal mining industry in Mongolia, highlighting its rich resources and potential for growth in exports, particularly to China [19][25]. Core Insights - Mongolia has abundant coal resources, with proven reserves of 252 million tons as of the end of 2020, including 135 million tons of lignite and brown coal, and 117 million tons of anthracite and bituminous coal [7][11]. - The coal mining sector is crucial for Mongolia's economy, with coal accounting for over 90% of the country's primary energy consumption, primarily used for power generation and exports [24][25]. - The report emphasizes the strategic importance of coal exports to China, which accounted for 94.9% of Mongolia's coal exports in 2024, showcasing the reliance on this market for growth [22][25]. Summary by Sections Coal Resource Overview - Mongolia's coal resources are mainly distributed across five regions, with the northern and southern areas being the most productive, contributing to 99% of the total output [7][11]. - The country has approximately 300 coal mines, with a significant portion of high-quality coking coal suitable for metallurgical processes [11][19]. Production and Export Trends - Coal production in Mongolia has seen fluctuations, with a peak of 32 million tons in 2011, primarily driven by export demand [21]. - The report forecasts a cumulative coal production of 97.72 million tons by 2024, reflecting a compound annual growth rate (CAGR) of 10.3% from 2013 to 2024 [21]. - In 2025, coal production is expected to slow down due to a decline in demand from the Chinese coking coal market [21]. Infrastructure and Trade Ports - Key coal export ports include Gashuunsukhait, Tsagaan Khad, and Mandula, with ongoing improvements in cross-border railway and logistics infrastructure to enhance export capacity [28][32]. - The report outlines various railway projects aimed at increasing coal export volumes by approximately 4 million tons annually [32]. Company Insights: Mongolian Coal - Mongolian Coal is identified as the largest high-quality coking coal producer and exporter in Mongolia, with a diversified resource portfolio including gold and copper [40][41]. - The company has strategically shifted towards resource diversification, reducing reliance on coal by expanding into gold and copper mining [46][90]. - As of mid-2025, the company reported total coal reserves of 612 million tons, with a focus on enhancing production capabilities and market presence [56][61]. Financial Performance - The company's revenue has shown significant growth, particularly from 2015 to 2019, driven by increased demand from infrastructure projects in China [55]. - The report notes a typical cyclical fluctuation in revenue, with a notable increase in 2022 and 2023, followed by a decrease in the first half of 2025 [55][61]. Cost Structure and Pricing - The report details the cost structure of coal production, with average costs remaining stable around $77 per ton from 2018 to the first half of 2025 [71]. - Pricing strategies are influenced by market dynamics, with a focus on maintaining competitive pricing in the context of international coal markets [68][70].

Investment Rating - The report maintains an "Overweight" rating for the coal industry [1] Core Insights - The ongoing negotiations regarding Indonesia's coal production quotas for 2026 have led some mines to suspend spot coal exports, which is expected to impact China's monthly average thermal coal consumption and imports by 0.5% and 4.2% respectively [2][3] - The export quota dispute is identified as the primary cause of the current fluctuations in Indonesia's coal supply, with the government planning to reduce the export quota from 790 million tons in 2025 to around 600 million tons in 2026 [2] - The report suggests that the impact of spot export restrictions on China's coal supply and demand is limited, as long-term contracts account for 90% of coal imports from Indonesia [3] - If the export restrictions extend to long-term contracts, the potential impact on China's monthly thermal coal consumption could reach 4.9% and imports could drop by 42% [4][8] - China's domestic coal production capacity is deemed sufficient to counteract supply disruptions, with the ability to cover approximately 36 million tons of coal supply, equivalent to 2.1 months of imports from Indonesia [5] Summary by Sections - **Export Quota Negotiations**: Indonesian mines are pausing spot coal exports due to disputes over production quotas, which may lead to a more flexible and self-driven export limitation by companies [2] - **Impact on China**: The suspension of spot exports is projected to have a minor effect on China's coal consumption and imports, with a maximum potential impact of 170 million tons per month if spot exports are completely halted [3] - **Domestic Response**: China's coal production capacity is capable of adjusting to maintain supply levels, mitigating the potential impact of Indonesian export restrictions [5] - **Price Implications**: If the export restrictions persist, it could lead to an increase in coal prices, benefiting companies with significant exposure to spot coal [8]

Group 1: Market Analysis - As of last Friday's close, the coking coal contract 2605 decreased to 1717 CNY/ton, while the coking coal contract 2605 fell to 1157 CNY/ton [2][8] - Daily coking coal production is 633,000 tons, down by 1,000 tons; daily coking coal output from 247 steel mills is 469,500 tons; the capacity utilization rate of 523 coking coal mines is 89.3%, up by 0.9% [2][8] - Daily raw coal production is 1,994,000 tons, an increase of 17,000 tons [2][8] Group 2: Demand and Supply - The operating rate of blast furnaces in 247 surveyed steel mills is 78.68%, down by 0.16% week-on-week, but up by 0.70% year-on-year; the capacity utilization rate for ironmaking is 85.51%, up by 0.03% week-on-week and 0.87% year-on-year [2][8] - The profit margin for steel mills is 40.69%, an increase of 0.86% week-on-week, but a decrease of 8.23% year-on-year; daily molten iron output is 2,281,000 tons, up by 9,000 tons week-on-week and 26,500 tons year-on-year [2][8] Group 3: Inventory Levels - Coking coal inventory at 247 steel mills is 6,616,000 tons, an increase of 113,000 tons, with a usable days supply of 12.4 days, up by 0.4 days [3][9] - Coking coal inventory at 247 steel mills is 8,032,000 tons, an increase of 10,000 tons; total coking coal inventory for independent coking enterprises is 11,777,000 tons, up by 449,000 tons, with a usable days supply of 12.9 days, unchanged from last week [3][9] Group 4: Market Outlook - The supply-demand contradiction for coking coal is limited, with major coking enterprises initiating price increases, but downstream steel mills are resistant due to thin profits and lack of significant increases in molten iron output [3][9] - Pre-Spring Festival inventory replenishment by steel mills is expected to further stimulate demand, with coking coal likely to continue fluctuating in the short term [3][9] - Domestic coal production remains stable, with high operating rates in major production areas and high imports of Mongolian coal; coking coal inventory continues to accumulate but remains at a relatively low level [3][9]

Investment Rating - The report maintains a positive outlook on the coal industry, indicating an "Overweight" rating, suggesting that the industry is expected to outperform the overall market [30]. Core Insights - The report highlights that coal prices are expected to remain elevated due to persistent cold weather and improving demand, with power coal prices showing a week-on-week increase [1][6]. - The report notes that the supply side is tightening due to safety inspections and environmental checks in major production areas, which is expected to support coal prices [1][5]. - The report recommends stable, high-dividend companies such as China Shenhua, Shaanxi Coal, and China Coal Energy, while also suggesting attention to growth-oriented coal companies [1]. Summary by Sections Recent Industry Policies and Dynamics - A national safety production meeting was held to enhance safety measures in coal mining, emphasizing a systematic approach to safety governance [5]. - A new coal transportation route from Longkou to Guangzhou has been established, which is significant for energy security and regional economic development [5]. Price Trends - As of January 9, 2026, power coal prices at Qinhuangdao port were reported at 526, 613, and 699 CNY/ton for different grades, reflecting week-on-week increases [1]. - The report indicates that the average daily consumption of coal has improved, with a noted increase in coal output from production areas [1][2]. International Oil Prices - Brent crude oil prices increased to 63.34 USD/barrel, reflecting a week-on-week rise of 4.26%, which may influence coal prices [11]. Port Inventory Trends - The average daily coal inflow at the Bohai Rim ports increased to 1.4613 million tons, while the outflow also saw a slight increase, indicating a dynamic supply-demand balance [16]. - Port inventories decreased to 26.727 million tons, a reduction of 2.91% week-on-week, suggesting tightening supply conditions [16]. Shipping Costs - Domestic coastal shipping costs decreased to 31.90 CNY/ton, while international shipping rates showed mixed trends, with some routes experiencing price increases [22]. Company Valuation Table - The report includes a valuation table for key companies, indicating their stock prices, market capitalizations, and projected earnings ratios for the upcoming years [25].

Investment Rating - The report maintains a positive outlook on the coal industry, suggesting a "Buy" rating for specific companies based on their stable dividends and growth potential [1]. Core Insights - The coal market is experiencing fluctuations in prices, with thermal coal prices expected to stabilize due to high demand driven by cold weather and reduced production from high-cost mines [1]. - The report highlights the impact of recent accidents in coal mines, which may lead to increased safety regulations and potential supply constraints [1]. - The report emphasizes the importance of seasonal demand, particularly in winter, which is expected to support coal prices in the near term [1]. Summary by Sections 1. Recent Industry Policies and Dynamics - The National Development and Reform Commission and the National Energy Administration have issued new rules for the long-term electricity market, aiming to adapt to changes in the energy landscape [6]. - Yulin plans to accelerate the construction of energy innovation demonstration zones, with new coal mines and increased production capacity [6]. - A new coal transportation corridor in Xinjiang has been launched, enhancing coal transport efficiency [6]. 2. Price Trends of Thermal and Coking Coal - As of December 26, thermal coal prices have shown a slight decline, with specific prices reported for various regions [7]. - The report notes that the price index for thermal coal in the Bohai Rim region has decreased, indicating a trend of price stabilization [7][10]. 3. International Oil Price Movements - Brent crude oil prices have increased slightly, which may influence coal prices due to the relationship between oil and coal markets [13]. - The report indicates a rising ratio of international oil prices to coal prices, suggesting potential implications for coal demand and pricing strategies [13]. 4. Port Inventory Trends - Coal inventory levels at Bohai Rim ports have increased, with a noted rise in daily coal outflows, indicating a dynamic supply-demand balance [18]. - The report highlights the importance of monitoring port inventories as they can signal future price movements in the coal market [18]. 5. Coastal Shipping Costs - Domestic coastal shipping costs have decreased, which may affect the overall cost structure for coal transportation [26]. - International shipping rates have also shown a downward trend, potentially impacting import dynamics for coal [26]. 6. Valuation of Key Companies - The report provides a detailed valuation table for key coal companies, indicating their stock prices, market capitalizations, and projected earnings [30]. - Companies such as China Shenhua and Shaanxi Coal are highlighted for their strong dividend yields and stable earnings forecasts [30].

Group 1 - The core viewpoint of the report indicates that coal prices are expected to show a trend of low first and high later in 2026, with the annual average likely to remain roughly the same as in 2025. Demand is anticipated to be a major drag factor, while supply-side constraints are relatively strong [1] - The coal industry is not experiencing overcapacity. The report attributes the unexpected decline in coal prices this year to excessive production beyond approved capacity, which poses challenges to safety and environmental standards. If supply and demand become excessively loose, there may still be room for policy tightening to regulate supply [2] - Demand for thermal coal is expected to remain at a peak level. The report forecasts that during the 14th Five-Year Plan period, green energy may begin to squeeze existing coal power demand, but overall electricity demand is likely to maintain steady growth, with a compound annual growth rate of over 4.5% from 2024 to 2030 [2] Group 2 - The report suggests that while domestic coking coal supply may have limited upward elasticity in 2026, there is potential for increased imports of Mongolian coal, leading to a relatively loose supply-demand situation for coking coal. However, the actual completion of steel production cuts remains uncertain due to policy negotiations [2] - Overall, the report concludes that the supply-demand balance for coking coal in 2026 is expected to be relatively loose, with the increase in Mongolian coal limiting upward price elasticity. Nonetheless, Mongolian coal cannot replace high-quality domestic coking coal, which is expected to remain in a relatively tight supply situation [2]

Investment Rating - The investment rating for the coal industry is "Positive" (maintained) [1] Core Viewpoints - The report emphasizes that coal prices are expected to stabilize, with a long-term upward trend anticipated for both thermal coal and coking coal prices. The recent decline in prices is viewed as a temporary adjustment, with expectations for recovery towards the target price range of 800-860 RMB per ton for thermal coal [3][4][13]. Summary by Sections Industry Overview - The report highlights that as of December 12, the price of Qinhuangdao Q5500 thermal coal was 753 RMB per ton, down 38 RMB from the previous week. The price at Guangzhou Port was 815 RMB per ton, indicating a completion of the previously suggested coal-electricity profit-sharing target of 750 RMB [3][4]. Price Trends - Thermal coal prices have shown a recent decline but are expected to recover due to tightening supply and increasing demand, particularly as the heating season begins and industrial production ramps up towards year-end [4][5]. - Coking coal prices have rebounded significantly, with the price at Jing Tang Port reaching 1630 RMB per ton, up from a low of 1230 RMB in July, marking a 41.5% increase in futures prices [3][4]. Investment Logic - The report outlines a four-step process for the expected price recovery of thermal coal, including the restoration of long-term contracts and achieving a profit-sharing equilibrium between coal and power companies, with a target price of around 750 RMB for 2025 [4][13]. - Coking coal prices are expected to be more influenced by supply and demand fundamentals, with target prices set based on the ratio of coking coal to thermal coal prices [4][13]. Investment Recommendations - The report suggests a dual logic for investing in coal stocks: cyclical elasticity and stable dividends. It identifies four main lines for stock selection: 1. Cyclical logic: Jin Kong Coal Industry, Yanzhou Coal Mining 2. Dividend logic: China Shenhua, Zhongmei Energy 3. Diversified aluminum elasticity: Shenhua Co., Electric Power Investment Energy 4. Growth logic: Xinji Energy, Guanghui Energy [5][14]. Key Indicators - The coal index fell by 3.64% this week, underperforming the CSI 300 index by 3.56 percentage points. The average PE ratio for the coal sector is 14.76, and the PB ratio is 1.3 [10][17].