Coal Industry - Coal prices have started to rebound, indicating a bottoming out of the market fundamentals as supply and demand improve since May 2025 [1] - Electricity consumption growth was only 3.1% from January to April 2025, significantly lower than 6.8% in 2024, but has increased to 4.4% in May, leading to a positive shift in thermal power generation [1] - Domestic coal production in May reached 400 million tons, with a notable decrease in imports, which fell by 17.7% year-on-year to 36.04 million tons [1] - The coal industry is expected to see a stable supply-demand balance in the medium term, with prices likely to rise during the summer peak [2] - As of June 20, 2025, the price of coking coal at major ports remained stable, with a slight decrease in inventory levels [3] Aviation Industry - The Chinese aviation industry is expected to see industry-wide profitability in May 2025, driven by a recovery in demand and ticket price increases [5] - Domestic ticket prices turned positive for the first time, with an estimated increase of 4% year-on-year in May, while fuel costs decreased by 19% [6] - Passenger traffic grew by 8% in May, with significant increases during the May Day holiday, indicating strong demand for family travel [6] - The summer travel season is anticipated to be optimistic, with airlines actively managing ticket sales and pricing strategies [8] - The supply of aircraft is expected to remain limited, but demand from family travel will continue to support high passenger volumes during the summer [8]

Core Viewpoint - The aviation industry is expected to see improved operating profits due to falling oil prices and a stable recovery in demand, with the International Air Transport Association (IATA) projecting a net profit margin of 3.7% for 2025, up from 3.4% in 2024 and a previous forecast of 3.6% [1] Group 1: Oil Price Impact - The average fuel price is expected to decrease to $86 per barrel in 2025, down from $99 per barrel in 2024, leading to a reduction in annual fuel costs to $236 billion, which will account for 25.8% of total operating costs, a 9.6% decrease from $261 billion in 2024 [2] - The significant drop in oil prices since the beginning of 2025, with WTI crude futures at $60.79 and Brent crude at $63.90, both down over 15%, is anticipated to improve airline cost structures [2] - Fuel costs represent about one-third of airlines' total operating costs, and a 10% decrease in fuel prices could potentially increase profits by approximately $5 billion for major Chinese airlines based on 2024 cost estimates [2] Group 2: Sustainable Aviation Fuel (SAF) - IATA forecasts that the production of Sustainable Aviation Fuel (SAF) will double to 2 million tons in 2025 from 1 million tons in 2024, although SAF currently accounts for only 0.7% of total aviation fuel usage [3] Group 3: Fuel Surcharge Adjustments - To mitigate fuel price volatility, airlines are optimizing capacity, enhancing marketing, and improving load factors to increase unit revenue [4] - The domestic aviation fuel surcharge mechanism in China allows airlines to adjust surcharges based on aviation fuel prices, with recent adjustments reducing surcharges for flights over 800 kilometers by $1 and eliminating them for shorter flights [5] Group 4: Industry Performance and Trends - The domestic aviation industry has shown signs of recovery, with major airlines like Air China, China Southern Airlines, and China Eastern Airlines reporting reduced losses in 2024 compared to 2023 [7] - The overall passenger load factor in the domestic aviation sector reached a new high of 83.3% in 2024, up 5.4 percentage points year-on-year, with major airlines reporting load factors around 85% [8] - The industry is expected to return to normal operations as international travel demand grows, aided by falling oil prices and the upcoming peak travel season [8]