Summary of Coal Industry Conference Call Industry Overview - The conference call focuses on the coal industry in China, particularly the impact of recent policies and market dynamics on coal supply and pricing [1][3][9]. Key Points and Arguments 1. **Coal Price Surge**: Post-holiday, coal prices have risen unexpectedly due to multiple factors, including prolonged summer heat in southern China, autumn rains in northern regions, and increased market demand for safe-haven assets amid the US-China trade war [1][2][4]. 2. **Supply-Side Policies**: The "anti-involution" policy has been implemented in three phases: preparation, response, and execution. This includes checks on overproduction and penalties for non-compliance, which are expected to tighten supply and heighten market expectations for future shortages [1][3][7]. 3. **Production Capacity**: The combined production capacity of Shanxi, Shaanxi, and Inner Mongolia has reached 70 million tons, with national capacity nearing 5 billion tons. However, actual production may be lower due to ongoing safety inspections and potential shutdowns [1][9]. 4. **Demand Outlook**: The manufacturing sector shows weak demand growth expectations, and the re-escalation of the US-China trade war poses long-term negative impacts. A potential cold winter could increase energy demand, further tightening supply [1][10]. 5. **Investment Recommendations**: Companies with strong dividend attributes and price elasticity are recommended for investment, including China Shenhua, China Coal Energy, Shaanxi Coal and Chemical Industry, and Yanzhou Coal Mining Company. Yanzhou is highlighted for its low valuation, high dividend yield, and significant growth potential [1][11][12]. 6. **Market Price Forecast**: The coal market is expected to maintain a tight balance from Q4 2025 to early 2026, with prices likely to rise. Current average prices are around 715-717 RMB/ton, lower than last year's average of 855 RMB/ton, but the overall trend is expected to be stable with an upward bias [1][13]. Additional Important Insights - The execution of the anti-involution policy will significantly influence supply dynamics, and strict enforcement could lead to further price support [1][8]. - The market's reaction to international uncertainties, particularly the US-China trade relations, will continue to drive demand for coal as a defensive asset [1][4][8].

行业深度："反内卷" - 煤炭执牛耳 20250922 摘要 国家首次正式出台煤炭反内卷政策（108 号文），旨在规范煤炭产量， 要求 2024 年产量不超过公告产能，2025 年上半年不超过 10%，重点 核查晋陕蒙疆等主产区，以稳定煤炭市场。 各省已自查并上报煤炭产量，内蒙古自查显示存在严重超产问题。政策 执行难点在于公告产能年份未明确，可能导致部分地区，尤其是大型先 进矿井，面临较大减产压力，预计影响量达 8,500 万吨。 内蒙古在产矿井约 300 座，合计产能 12.31 亿吨，与 2022 年 1 月公告 产能相符，意味着 2022 年后核增的约 4 亿吨产能可能不被纳入。反内 卷政策将收缩煤炭供给，部分手续不全的核增矿井或需退回。 中国历史上多次通过限制进口稳定煤价，如 2014 年商品煤质量管理办 法和 2020 年限制澳煤进口。当前国际局势复杂，直接限制进口难度大， 但国家统筹安排可防止国外供应大量涌入。 煤炭供给侧改革始于 2015 年底，通过去产能、停建项目及配套支持政 策，有效改善行业状况。目前全国一级矿井总产能达 20 亿吨，单井规 模显著增加，表明去产能政策成功。 Q&A 煤炭反内 ...

Summary of Coal Industry Conference Call Industry Overview - The coal industry is currently influenced by anti-involution policies, with significant supply-side constraints introduced in Shanxi, Shaanxi, Inner Mongolia, and Xinjiang, indicating potential for continued policy support in the future [1][5][7] - National coal production has seen a notable year-on-year decline since July, reflecting the effectiveness of these policy constraints [1][6] Key Points and Arguments - **Production and Supply Dynamics**: - After the July 10 announcement of the anti-involution policy, coal production has decreased significantly, with supply recovery post-September 3 military parade being limited [1][6][10] - Demand, particularly for iron and steel production, has rebounded quickly, with iron output exceeding 240 million tons, indicating that demand recovery is outpacing supply [4][6] - The introduction of new production constraints in key coal-producing regions is expected to lead to a marginal improvement in supply-demand balance [2][10] - **Price Trends**: - Recent trends show that both spot and futures prices for coal have performed well, with expectations for thermal coal prices to fluctuate between 700-800 RMB per ton [3][12][13] - The market has reacted positively to the new policies, although there was a temporary price correction due to significant events [3][8][12] - **Future Industry Outlook**: - The coal sector is expected to continue benefiting from anti-involution policies, which are crucial for macroeconomic stability [5][11] - The potential exit of approximately 1.5 billion tons of unapproved production capacity by the end of 2025 could lead to a 2% supply disturbance, further tightening the market [11] Additional Important Insights - **Impact on PPI**: - Coal prices significantly influence the Producer Price Index (PPI), with coal accounting for over 26% of PPI, making the stabilization of coal prices critical for overall economic health [7] - **Investment Opportunities**: - Companies with strong dividend yields and potential for valuation recovery, such as Shenhua and China Coal, are highlighted as attractive investment options [12][15] - The focus should also be on flexible coal companies that can adapt to supply constraints and price increases [15][16] - **Market Sentiment**: - The current market sentiment is characterized by low institutional holdings and a gradual improvement in fundamentals, suggesting potential for a rebound in the coal sector [16] This summary encapsulates the key discussions and insights from the conference call regarding the coal industry, highlighting the interplay between policy, supply-demand dynamics, and market performance.

Summary of Coal Industry Conference Call Industry Overview - The coal production in the four provinces of Shanxi, Shaanxi, Inner Mongolia, and Xinjiang accounts for 81.4% of the national total, with varying growth rates: Shanxi at 7.2%, Inner Mongolia flat, Xinjiang at 8.2%, and Heilongjiang at 34.1% [1][2][3] - National coal imports decreased by 13% year-on-year in the first seven months, but increased by 20% month-on-month in August, indicating fluctuating demand influenced by price and policy [1][2] - Power generation increased by 1.3% year-on-year in the first seven months, with a notable 3.1% increase in July due to high temperatures [1][2] Key Points on Supply and Demand - Total coal supply for the first seven months was 3.04 billion tons, a 2.1% increase year-on-year, with a 5.8% decrease in July [2] - Coal inventory at enterprises rose by 46% year-on-year in July, while major port inventories decreased by 3% [1][2] - The implementation of Document 108 aims to control overproduction to alleviate market pressure, but its effectiveness is contingent on cooperation from safety supervision departments [1][6][7] Market Dynamics - The trading activity in the thermal coal market has decreased, with power companies maintaining sufficient inventory and non-power sector demand not significantly increasing [5] - The price of 5,500 kcal thermal coal is expected to fluctuate between 650 and 700 RMB/ton in the second half of the year [1][21] Challenges and Risks - The coal industry faces significant downward pressure, with nearly 60% of companies reporting losses, although this is an improvement from 80% during the most challenging years [10] - Legal risks associated with overproduction have increased since the 2019 safety production law reform, making enterprises cautious about exceeding production limits [10] - Local enterprises are under economic pressure, leading to some overproduction, which requires strict regulation [10] Future Outlook - The coal supply is expected to maintain slight growth in the coming months, with production potentially increasing post-October if no further measures are implemented [4][9] - The potential for new import quota policies is low due to ongoing trade tensions, but temporary measures to reduce imports may be considered [22] Additional Insights - The implementation of the 276 working day system for capacity reduction is limited, with only a few mines potentially adopting it due to operational challenges [12] - The current coal production capacity that has not completed necessary procedures is approximately 100 million tons, mainly in Inner Mongolia and Xinjiang [15] - The transportation costs for coal from Xinjiang are high, providing some support for domestic coal prices when port prices fall below 650 RMB/ton [17][18] This summary encapsulates the key insights and data from the conference call regarding the coal industry, highlighting production trends, market dynamics, challenges, and future expectations.