Summary of Conference Call on the Coal Industry Industry Overview - The conference call focused on the coal industry, particularly the impact of Indonesia's RKB policy tightening on coal production and exports, and its implications for the Chinese import market [1][2]. Key Points and Arguments Indonesian Coal Production and Export - Indonesia's RKB policy is expected to set the 2026 production target at 650 million tons, a reduction of over 130 million tons compared to 2025, significantly impacting China's coal imports, especially in coastal regions reliant on Indonesian coal [1][2]. - China's coal imports have remained high, with an estimated 490 million tons in 2025, of which over 240 million tons are from Indonesia [1][2]. - The reduction in Indonesian coal supply will lead to a more diversified structure of imported coal varieties and increase the demand for blended coal in coastal areas [1][4]. Price Dynamics - Since January, coal prices from Indonesia and Australia have been rising, with Indonesian 4,600 kcal coal prices increasing by approximately $4.5 per ton and Australian 5,500 kcal prices rising by nearly $11 per ton [1][3]. - The current market prices are above the index levels, indicating strong market expectations for tighter supply [1][3]. - The Indonesian Ministry of Energy and Mineral Resources aims to maintain the 3,800 kcal FOB price above $55 per ton to support domestic coal mining operations, although actual market prices have already exceeded this level [1][8]. Supply Chain and Procurement Behavior - The tightening of RKB approvals has led to a significant impact on coal exports and has affected the procurement behavior of Chinese power plants, with a decrease in bidding willingness and an increase in the risk of failed tenders [5][6]. - Domestic coal inventories are low, with reports indicating that PLN's available coal days in certain regions are below three days, reflecting a tight supply situation [7]. Future Expectations - The RKB data for March is expected to clarify the production outlook, with the first half of the year likely maintaining around 650 million tons, while actual increments may be released in the second round of updates in June-July [3][6]. - The overall production for the year may ultimately fall within the range of 700-720 million tons, influenced by cost factors leading to the exit of smaller mines [6][10]. Market Dynamics and Competition - The competition from other coal sources is limited, with Australia and Russia being the main alternatives, but price disparities and logistical challenges hinder their ability to fill the gap left by Indonesian coal [12][14]. - The domestic coal supply is unlikely to become significantly more relaxed in the short term, with limited new production capacity expected in the next three months [15]. Price Trends and Market Sentiment - The market sentiment indicates that despite the traditional seasonal patterns, the coal price dynamics in 2026 may not follow historical trends due to supply-demand mismatches and low inventory levels [16][17]. - The expectation is for prices to remain strong in March, with potential increases, but a stabilization or slight correction may occur in April [17]. Other Important Insights - The tightening of RKB approvals has not only affected exports but has also led to a shift in procurement strategies among Chinese power plants, with a notable decrease in tender activities [5][6]. - The Indonesian government's policies aim to support coal prices and tax revenues, which may further influence production decisions and market dynamics [10]. This summary encapsulates the critical insights from the conference call regarding the coal industry, focusing on the implications of Indonesian policies, price dynamics, and market expectations.

Summary of Conference Call on Coal Import Status and Outlook Industry Overview - The conference call discusses the coal import situation in China, particularly focusing on the impact of Indonesia's coal production reduction plan (RKB) set at 600 million tons, which is a decrease of approximately 175 million tons from last year's estimated production of 775-790 million tons [2][3][15]. Key Points and Arguments Impact of Indonesian Coal Production Reduction - The reduction in Indonesian coal production has led to significant price increases in China's coastal power plant bidding, with the price of 3,800 kcal Indonesian coal rising by 34 yuan to 499 yuan within a week [2][5]. - Some power plants, such as Guoneng Taizhou and Huaneng, experienced instances of no bids, a situation not seen in the past two years, indicating traders' caution regarding high prices [3][5]. Price Trends and Market Sentiment - Domestic thermal coal prices have shown signs of increase, with prices in the Bohai Rim market rising from 698 yuan/ton on February 6 to 711 yuan/ton on February 9, with expectations of further increases before the holiday [8]. - The overall coal market is tight, with port inventories down nearly 4 million tons year-on-year, and some supply capacities exiting the market due to increased regulatory scrutiny during the Two Sessions [8][17]. International Coal Market Dynamics - Due to the tight supply from Indonesia, traders are turning to alternative sources like Russia and Australia, leading to a surge in Australian coal prices, which increased by over 4 dollars in a week [6][9]. - The international coal market significantly influences domestic prices, with expectations that domestic coal prices may continue to rise post-holiday, potentially reaching around 800 yuan in March [4][11]. Future Expectations - If the RKB situation does not improve, March prices could rise to around 800 yuan, with current bidding activity being low, indicating potential supply tightness [11][18]. - The Indonesian government's measures to control coal production and prioritize domestic supply for PLN (Perusahaan Listrik Negara) further exacerbate the international supply constraints [16][19]. Investment Opportunities - The current market conditions present a favorable opportunity for investors in coal stocks, with predictions of significant price increases leading up to and following the holiday period [23][24]. Other Important Insights - The Indonesian government's policies, including the introduction of the HBA 2 price index, aim to stabilize coal prices but have also led to increased costs for miners, affecting production levels [19][20]. - The shift in China's coal import strategy since the onset of the Russia-Ukraine conflict has resulted in a broader range of coal types being imported, including lower calorific value coals, which now account for a larger market share [14]. This summary encapsulates the critical insights from the conference call regarding the coal import landscape, price trends, and investment opportunities in the context of recent developments in Indonesia and the broader international market.

1. Report Industry Investment Rating No information provided. 2. Core Viewpoints of the Report - This week, news of Indonesian coal exports disturbed the market, but the impact was short - lived, causing the prices of coking coal and coke to rise and then fall. With domestic coal mines starting to shut down for the holiday, daily production has significantly declined. Coal mine clean coal inventories are being depleted, and downstream enterprises are restocking as needed [4]. - Indonesia has denied the market's rumor of production cuts. In the short term, about 6.16 million tons of monthly imported Indonesian coal are affected, accounting for 15.1% of China's monthly imports, but the actual impact is limited. In the long term, if Indonesia cuts production, China can make up for the gap by increasing domestic production and imports from Russia and Mongolia, but the cost - effectiveness of Indonesian coal is hard to replace. Future attention should be paid to the RKAB approval results [5]. - With only one week left until the Lunar New Year, downstream pre - holiday restocking is almost over. As the impact of the news weakens, the futures market has been reducing positions and declining since Thursday. With relatively limited supply - demand contradictions, the market is expected to fluctuate within a range in the next week, and a cautious bearish attitude is recommended [5]. 3. Summary by Relevant Catalogs 3.1. Coking Coal Market 3.1.1. Coking Coal Warehouse Receipt Cost | Variety | Location | Date | Spot Price | Warehouse Receipt Cost | | --- | --- | --- | --- | --- | | Meng 5 | Tangshan | 2026 - 02 - 06 | 1430 | 1203 | | Meng 5 | Inner Mongolia | 2026 - 02 - 06 | 1230 | 1225 | | Anze Main Coking Coal | Shanxi | 2026 - 02 - 05 | 1570 | 1310 | | Gujiao Main Coking Coal | Shanxi | 2026 - 02 - 05 | 1491 | 1231 | | Pingmei No.1 | Pingdingshan | 2026 - 02 - 06 | 1630 | 1145 | | Shan Jiao Rizhao No.1 | Rizhao | 2026 - 02 - 06 | 1600 | 1150 | | Xiang Jiao No.1 | Linfen | 2026 - 02 - 06 | 1400 | 1120 | | Kaijia No.1 | Jiexiu | 2026 - 02 - 06 | 1500 | 1200 | [10] 3.1.2. Basis | Contract | Basis | Weekly Change | Basis Rate | One - Month Average | Seasonal Deviation | | --- | --- | --- | --- | --- | --- | | January | - 72 | 2 | - 5.85% | - 99 | - 162 | | May | 170 | - 11 | 13.82% | 145 | - 23 | | September | 94 | - 9 | 7.64% | 67 | - 60 | [12] 3.1.3. Coking Coal Supply - **Mines**: The average daily output of raw coal from 523 mines this week was 1.9253 million tons, a decrease of 52,900 tons compared to the previous week; the average daily output of clean coal was 754,500 tons, a decrease of 16,200 tons compared to the previous week [19]. - **Coal Washeries**: The average daily output of sample coal washeries was 263,100 tons, a decrease of 46,000 tons compared to the previous week; the capacity utilization rate was 35.54%, a decrease of 1.26% compared to the previous week [22]. 3.1.4. Coking Coal Imports - In 2025, China's cumulative coking coal imports decreased by 2.7% year - on - year. In December 2025, imports from Mongolia increased by 7.6% month - on - month and 59.1% year - on - year [23][26]. | Country | As of 2025 - 12 - 31 | Cumulative Value | Monthly MoM | Monthly YoY | Cumulative YoY | | --- | --- | --- | --- | --- | --- | | Mongolia | 672 | 6007 | 7.6% | 59.1% | 5.8% | | Russia | 360 | 3276 | 31.3% | 55.0% | 8.4% | | Canada | 110 | 1080 | 109.9% | 8.4% | 19.8% | | Australia | 178 | 886 | 109.3% | 10.5% | - 14.0% | | Other Countries | 57 | 613 | 54.3% | - 62.8% | - 60.6% | | Total | 1377 | 11863 | 28.3% | 28.6% | - 2.7% | [25] 3.1.5. Coking Coal Auction Data | Coking Coal Auction Data | 2026 - 01 - 30 | 2026 - 01 - 23 | Weekly Change | | --- | --- | --- | --- | | Listing Volume (10,000 tons) | 154.43 | 137.735 | 16.70 | | Transaction Rate (%) | 70.22 | 88.02 | - 17.8 | | Unsold Rate (%) | 29.78 | 11.98 | 17.8 | [29] 3.2. Coke Market 3.2.1. Coke Warehouse Receipt Cost | Variety | Location | Date | Spot Price | Warehouse Receipt Cost | | --- | --- | --- | --- | --- | | Rizhao Port Wet - Quenched Coke | Shandong | 2026 - 02 - 05 | 1480 | 1736 | | Rizhao Port Dry - Quenched Coke | Shandong | 2026 - 02 - 06 | 1680 | 1725 | | Lvliang Dry - Quenched (Pengfei Group) | Shanxi | 2026 - 02 - 06 | 1530 | 1700 | | Lvliang Dry - Quenched (Hengfeng Group) | Shanxi | 2026 - 02 - 06 | 1570 | 1740 | | Lvliang Dry - Quenched (Shanxi Jinhui) | Shanxi | 2026 - 02 - 06 | 1570 | 1690 | | Jinzhong Wet - Quenched (Zhongjin Taihang) | Shanxi | 2026 - 02 - 06 | 1310 | 1697 | | Jinzhong Wet - Quenched (Jiexiu Changsheng) | Shanxi | 2026 - 02 - 06 | 1330 | 1719 | | Handan Dry - Quenched (Xinsheng Coal Chemical) | Hebei | 2026 - 02 - 06 | 1550 | 1650 | [39] 3.2.2. Coking Profit | Region | 2026 - 01 - 29 | 2026 - 01 - 22 | Weekly Change | Same - Period Difference | | --- | --- | --- | --- | --- | | National | - 55 | - 66 | 11 | - 28 | | Shanxi | - 41 | - 51 | 10 | - 41 | | Hebei | 0 | - 11 | 11 | - 11 | | Inner Mongolia | - 92 | - 103 | 11 | 4 | | Shandong | 2 | - 8 | 10 | - 1 | [41] 3.2.3. Basis | Contract | Basis | Weekly Change | Basis Rate | One - Month Average | Seasonal Deviation | | --- | --- | --- | --- | --- | --- | | January | - 262 | - 1 | - 17.68% | - 258 | - 174 | | May | - 69 | 39 | - 4.63% | - 56 | - 129 | | September | - 135 | 41 | - 9.09% | - 122 | - 164 | [44] 3.2.4. Coke Inventory Distribution | Coke Inventory Distribution | 2026 - 02 - 06 | 2026 - 01 - 30 | Weekly MoM | YoY | | --- | --- | --- | --- | --- | | Steel Mills | 6923,800 tons | 6781,900 tons | 141,900 tons | 0.21% | | Steel Mill Inventory Usable Days | 12.76 days | 12.54 days | 0.22 days | - 3.8% | | Independent Coking Enterprises | 827,400 tons | 843,900 tons | - 16,500 tons | - 47.18% | | Ports | 2.011 million tons | 1.98065 million tons | 30,350 tons | 13.49% | | Tianjin Port | 820,000 tons | 770,000 tons | 50,000 tons | 39.0% | | Qingdao Port | 740,000 tons | 780,000 tons | - 40,000 tons | 4.23% | | Rizhao | 450,000 tons | 430,000 tons | 20,000 tons | - 4.26% | | Total | 9.7622 million tons | 9.60645 million tons | 155,750 tons | - 4.74% | [56]

Market Overview - The thermal coal market is characterized by a stalemate between supply-side price support and weak demand response, with supply gradually recovering and port inventories decreasing, but actual transactions remain light due to high inventory levels at power plants and weak procurement from non-electric sectors [1][2][4] Supply Side - Main production areas are gradually resuming operations, with prices showing differentiation; some high-quality coal mines have raised prices by 5-10 yuan/ton due to slight demand recovery, while overall market activity remains low [2] - Port inventories have decreased to 28.37 million tons, down 120,000 tons day-on-day, with trade merchants reluctant to sell at low prices due to ongoing cost disadvantages, particularly for low-sulfur coal types [3] Demand Side - Daily coal consumption at power plants has slightly increased to 4.515 million tons, up 159,000 tons, but total inventory remains high at 110 million tons, limiting the need for large-scale procurement [4] - Non-electric sector demand is weak, with limited increases in coal usage from industries like cement and chemicals, leading to a cautious procurement stance [4] - Weather conditions are expected to bring some marginal increases in consumption, but overall temperatures are close to seasonal averages, limiting significant spikes in coal usage [4] Import Coal - Indonesian coal prices have risen to FOB $49-50 per ton due to export restrictions, while Australian coal prices are at FOB $77-78 per ton, with high shipping costs narrowing the price gap with domestic coal [5][6] - The terminal's acceptance of high-priced imported coal is low, with procurement focused on future contracts [7] Market Dynamics and Outlook - The current core contradiction in the market is between expectations of supply contraction and the reality of high inventories, with structural shortages in low-sulfur coal types but difficulties in trading ordinary coal types [8] - The market is in a phase of "weak reality and strong expectations," with no strong drivers to break the current balance; short-term coal prices are expected to remain volatile with limited upward movement until inventories decrease significantly [9]