Investment Rating - The report maintains a "Positive" investment rating for the coal industry [1] Core Viewpoints - The coal price has successfully crossed the fourth target, and the logic for price stability remains intact. The current dynamics are influenced by supply contraction and a surge in demand due to seasonal heating needs [3][4] - The report indicates that both thermal coal and coking coal prices are at a turning point, with thermal coal being a policy-driven commodity. The price recovery process involves several stages, including the restoration of long-term contracts and achieving a balance in profitability between coal and power companies [4][13] - The report highlights that the current coal prices are still at historical lows, providing room for a rebound, especially with the onset of the heating season and supply-side policies [5][14] Summary by Sections Industry Investment Rating - The coal industry is rated as "Positive" [1] Price Trends - As of November 28, the price of Qinhuangdao Q5500 thermal coal is 816 CNY/ton, showing a slight decrease from the previous week. The price at Guangzhou Port is 855 CNY/ton, having reached the target of 750 CNY for coal-power profitability [3][4] - Coking coal prices have also seen significant rebounds, with the price at Jing Tang Port reaching 1670 CNY/ton, up from 1230 CNY/ton in July, marking a 48.4% increase [3][4] Investment Logic - The report outlines that the price of thermal coal will follow a recovery process involving the restoration of long-term contracts and achieving a profitability balance for coal and power companies, with an ideal target price of around 750 CNY for 2025 [4][13] - Coking coal prices are more influenced by market dynamics, with target prices based on the ratio of coking coal to thermal coal prices, indicating potential target prices of 1608 CNY to 2064 CNY depending on market conditions [4][13] Investment Recommendations - The report suggests a dual logic for coal stocks: cyclical elasticity and stable dividends. It identifies four main lines for stock selection: cyclical logic, dividend logic, diversified aluminum elasticity, and growth logic [5][14] - Specific companies recommended include Jin控煤业, 兖矿能源 for cyclical logic, 中国神华, 中煤能源 for dividend logic, 神火股份, 电投能源 for diversified aluminum elasticity, and 新集能源, 广汇能源 for growth logic [5][14]

Core Viewpoint - The report indicates a continued increase in coking coal prices in China and Australia, driven by supply and demand dynamics in the market [1][4]. Price Trends - As of August 18, 2025, the comprehensive coking coal price index in China reached 1357.36 CNY/ton, an increase of 157.43 CNY/ton or 13.12% month-on-month [1][2]. - The price for Australian premium coking coal at the Jing Tang Port was reported at 1530.00 CNY/ton as of August 22, 2025, up by 110.00 CNY/ton or 7.75% from the previous month [1][2]. - The Platts price index for hard coking coal at the Peakview Mine was 203.00 USD/ton, reflecting a rise of 14.40 USD/ton or 7.64% month-on-month [1][2]. - Coking coal futures prices increased to 1162 CNY/ton as of August 22, 2025, up by 113.5 CNY/ton or 11% from the previous month [2]. Inventory Levels - The total coking coal inventory at three ports (Qinhuangdao, Huanghua, and Caofeidian) decreased to 254.99 million tons as of August 22, 2025, down by 30.85 million tons or 10.79% month-on-month [2][5]. - The inventory of coking coal at 247 steel mills increased to 812.31 million tons, up by 12.80 million tons or 1.60% month-on-month [2]. Independent Coking Plants - The inventory of coking coal at 230 independent coking plants decreased to 823.94 million tons, down by 17.27 million tons or 2.05% month-on-month, but up by 178.56 million tons or 27.67% year-on-year [3]. - The average available days of coking coal at these plants fell to 11.80 days, a decrease of 0.40 days or 3.28% month-on-month [3]. - The capacity utilization rate of independent coking enterprises rose to 74.42%, an increase of 0.97 percentage points month-on-month [3]. Production Data - In July, the monthly production of coke reached 41.855 million tons, an increase of 15.2 thousand tons or 0.36% month-on-month [3]. - The monthly production of pig iron was 70.7974 million tons, down by 110.77 thousand tons or 1.54% month-on-month [3]. - The monthly production of crude steel decreased by 4.24% month-on-month [3]. Conclusion - The report concludes that coking coal prices in China and Australia continue to rise, with futures prices showing a significant rebound from 719 CNY on June 3 to 1162 CNY on August 22, marking a cumulative increase of 61.6% [4].

Investment Rating - The industry investment rating is "Positive" [5] Core Insights - The price index for coking coal in China has increased, with a reported price of 1357.36 CNY/ton as of August 18, 2025, reflecting a month-on-month increase of 157.43 CNY/ton, or 13.12% [9][10] - Coking coal inventory at three major ports has decreased, totaling 2.5499 million tons as of August 22, 2025, down by 308,500 tons, or 10.79% from the previous month [17][20] - The production capacity utilization rate of independent coking enterprises has risen to 74.42%, an increase of 0.97 percentage points month-on-month [2][28] Summary by Sections Coking Coal Prices - The comprehensive coking coal price index in China reached 1357.36 CNY/ton, with a month-on-month increase of 157.43 CNY/ton, or 13.12% as of August 18, 2025 [9] - Prices for coking coal from major sources, including Australian coking coal, have also risen, with the price at 1530.00 CNY/ton, reflecting a 7.75% increase [12][13] Inventory Levels - The total coking coal inventory at three major ports (Qinhuangdao, Huanghua, and Caofeidian) has decreased to 2.5499 million tons, a reduction of 308,500 tons, or 10.79% month-on-month [17][20] - Independent coking plants have reported a total coking coal inventory of 8.2394 million tons, down by 172,700 tons, or 2.05% month-on-month [2][20] Production Metrics - The average available days of coking coal for independent coking plants decreased to 11.80 days, down by 0.40 days, or 3.28% month-on-month [2][20] - Coking enterprises' production capacity utilization rate increased to 74.42%, up by 0.97 percentage points month-on-month [2][28] - Coking production in July reached 41.855 million tons, a month-on-month increase of 15,200 tons, or 0.36% [28][32]

Summary of Coal Industry Conference Call Industry Overview - The conference call discusses the coal industry, specifically focusing on the thermal coal market in China for 2025 and beyond [1][2][3]. Key Points and Arguments Supply and Demand Dynamics - In 2025, the thermal coal market is expected to have a loose supply, with coal mine supply recovering faster than downstream demand post-Spring Festival, leading to a rapid price drop in February [1][2]. - As of April 2025, the CCI 5,500 thermal coal price at ports was 657 RMB/ton, which is 22 RMB/ton lower than the medium to long-term contract price, marking a four-year low for pit coal prices [1][2]. - The total coal production capacity is projected to reach 6.3 billion tons by the end of 2024, with thermal coal accounting for 4.9 billion tons, ensuring supply security [1][4]. - In March 2025, national raw coal production increased by 9.6% year-on-year, with key regions (Shanxi, Shaanxi, Inner Mongolia) contributing 81.73% of the total [1][4]. Price Trends - The overall trend for thermal coal prices in 2024 was a stepwise decline, with prices expected to remain under pressure in the second half of 2025 due to weak demand and high inventory levels [2][4]. - The average price for thermal coal in 2025 is projected to be around 680 RMB, with potential short-term rebounds due to production resumption and increased output [12][13]. Import and Export Insights - In 2024, coal imports reached a record high of 543 million tons, a 14% increase year-on-year, with thermal coal imports at 420 million tons [6]. - For 2025, total coal imports are expected to decrease to approximately 525 million tons, a 3.4% decline from the previous year [6]. Inventory Levels - As of April 2025, inventory levels across various sectors are high, with 345.4 million tons held by 100 key enterprises, a 9.65% increase year-on-year [10]. - Northern ports reported a 30.42% increase in inventory, while coastal provinces showed a slight decrease of 2.62% [10]. Sector-Specific Demand - The demand from the cement industry continues to decline, while the chemical sector shows better performance, driven by new capacity for products like methanol [8][9]. - The share of thermal power generation is expected to decrease from 70% in 2023 to 61% by 2025, as non-fossil energy sources grow [3][7]. Additional Important Insights - The coal mining sector is experiencing a significant increase in production, but the phenomenon of "quantity compensating for price" is not widespread [5]. - The profitability of coal mines varies by region, with some areas like Shanxi facing higher production costs leading to losses, while others like Shaanxi and Inner Mongolia remain profitable [11][21]. - The relationship between inventory levels and coal prices is complex, with high inventory levels currently exerting downward pressure on prices [15][16]. This summary encapsulates the key insights from the conference call regarding the coal industry, focusing on supply-demand dynamics, price trends, import/export data, inventory levels, and sector-specific demand changes.