Summary of China Coal Energy Company Conference Call Industry Overview - **Coal Market**: In September 2025, the thermal coal market experienced fluctuations due to seasonal demand, tight supply, and macroeconomic recovery, with port prices for 5,500 kcal thermal coal rising by 10 CNY/ton to 705 CNY/ton, a year-on-year decrease of 19% [2][5] - **Coking Coal Market**: The coking coal market showed an upward trend due to increased terminal inventory and production, with Shanxi low-sulfur coking coal prices rising by 50 CNY/ton to 1,521 CNY/ton, down 11% year-on-year [2][6] - **Urea Market**: The urea market faced significant price drops due to off-season agricultural demand, with expected prices in October between 1,500-1,650 CNY/ton, a decrease of about 15% compared to last year's average [2][7] - **Polyolefins Market**: Prices for polyolefins declined due to insufficient demand and increased supply, with expectations of continued weakness in October [2][7] - **Methanol Market**: The methanol market saw price increases driven by procurement and market conditions, with forecasts for October prices between 1,800-2,000 CNY/ton [2][8] Company Performance - **Production and Sales**: In the first three quarters of 2025, China Coal Energy produced 110.2 million tons of commercial coal, a decrease of 730,000 tons year-on-year. Total sales were 190 million tons, down 15 million tons year-on-year, with self-produced coal sales increasing by 1.07 million tons [3][4] - **Urea and Methanol Production**: Urea production increased by 28,000 tons to 159.4 million tons, while methanol production rose by 20.6 million tons to 147.8 million tons [3][4] - **Equipment Output**: Equipment output value was 7.2 billion CNY, a decrease of 500 million CNY year-on-year, primarily due to the coal market's impact [3][4] Market Outlook - **Thermal Coal**: The thermal coal market is expected to continue fluctuating in October, with prices projected to range between 685-735 CNY/ton [5] - **Coking Coal**: The coking coal market is anticipated to experience a pullback after an initial rise due to increased imports and supply [6] - **Urea and Polyolefins**: Both markets are expected to remain weak in October due to seasonal factors and cautious replenishment by downstream distributors [7] - **Methanol**: The methanol market is expected to remain strong due to maintenance and increased demand from downstream ethylene facilities [8] Additional Insights - **Long-term Contracts**: The company reported significant improvement in long-term contract fulfillment rates, meeting regulatory requirements and maintaining a high level [9] - **Price Stability**: The company believes that with a price around 723 CNY, there will be no significant issues with price inversion across different regions [10] - **Coal Price Stability Factors**: Key factors supporting stable coal prices include a slight increase in domestic supply (less than 3%), a decrease in imports (about 11%), and a GDP growth rate of approximately 5.5% supporting energy demand [11][12] - **Winter Storage Plans**: Companies are planning for winter and spring coal needs, with orderly storage expected to have minimal impact on the spot market [13]

Summary of Shaanxi Coal Industry Conference Call Industry Overview - The coal price is significantly influenced by demand, with a slight improvement expected in the second half of the year, but it is unlikely to exceed the levels of the first quarter [2][5] - A reduction in imported coal is anticipated, with an estimated decrease of several million tons for the year, making macroeconomic demand changes a key factor [2][5] Company Performance and Strategy - Shaanxi Coal aims to maintain stable production, with an expected output of around 170 million tons, as production is nearing its ceiling [2][6] - The company is currently facing slow progress in the approval process for new mines, which is critical for future production growth [2][6] - The company has not received any notifications regarding anti-involution policies, indicating that self-regulation in the industry is challenging and may require administrative measures for effective management [2][7][8] - Shaanxi Coal has implemented a long-term contract strategy, ensuring that 60% of contracts are executed at a capped price of 520 RMB/ton, with excess amounts settled at market prices to secure sales and profit margins [2][9][10] Financial Performance - The average selling price of coal decreased in the second quarter, with April's average at approximately 390 RMB/ton, stabilizing around 380 RMB/ton in May and June [4] - The company does not plan to disclose a mid-year performance report as it does not meet mandatory requirements [12] - A mid-term dividend is likely due to the company's strong performance last year, with positive feedback from regulatory authorities [13] Cost and Taxation - The decline in average prices in the second quarter led to a reduction in resource taxes, while other costs remained stable, with an average cost of about 280 RMB/ton, returning to pre-pandemic levels [14] - The entry of the central environmental supervision team has not impacted production operations, focusing instead on oversight and reminders [15] Operational Insights - The current production capacity can be sustained for approximately 70 years, although new capacity will be needed to compensate for any depletion of existing mines [19] - The company has no sales pressure due to the scarcity and quality of its coal types, and it aims to increase sales prices through favorable policies [11] - The impact of recent freight adjustments is minimal as the final freight costs are borne by customers [22] Additional Notes - The company’s asset management business has been cleared, allowing a focus on core operations [3] - The second quarter saw the hot pot restaurant segment contribute less than 300 million RMB, slightly lower than the first quarter [21] - The one-ticket revenue system does not affect profit calculations, as freight is included in both revenue and costs, but is excluded in complete cost calculations [16][17]