Investment Rating - The report maintains a "Positive" investment rating for the coal industry [8] Core Views - The coal price has dropped below 700 RMB/ton, but the bottom is expected to be established due to tightening supply under the "anti-involution" context, leading to potential profit recovery for coal companies in the future [6][7] - Short-term excess returns in the coal sector may not be significant, but the probability of achieving absolute returns is high, with a focus on long-term investment opportunities in companies like Yanzhou Coal Mining Company, China Power Investment Corporation, Lu'an Mining, and Shaanxi Coal and Chemical Industry [6][7] Summary by Sections Weekly Tracking Summary - The coal index (Yangtze River) fell by 2.71%, underperforming the CSI 300 index by 5.42 percentage points, ranking last among all sectors [13] - As of August 29, the market price for Qinhuangdao thermal coal was 690 RMB/ton, down 14 RMB/ton week-on-week [13] Supply and Demand Situation - As of August 28, the daily coal consumption in 25 provinces was 602.7 million tons, down 6.2% week-on-week [14] - The available days of inventory for power plants in these provinces increased to 19.8 days, up 1.1 days week-on-week [14] Price Trends - The report indicates that the price of thermal coal is expected to stabilize and potentially rise to 700-750 RMB/ton due to limited supply and upcoming replenishment demand [6][14] - The average price of thermal coal in Q3 2025 is projected to improve, with the average price as of August 29 being 663 RMB/ton, an increase of 5% from Q2 [6][7] Company Performance - Major coal companies reported significant profit declines in Q2 2025 due to falling coal prices, but profits are expected to recover in Q3 2025 [6][7] - Specific companies highlighted for potential investment include Yanzhou Coal Mining Company, China Shenhua Energy, and Shaanxi Coal and Chemical Industry, which are seen as stable profit leaders [7]

Report Industry Investment Ratings - Steel: Sideways [1][2] - Iron Ore: Sideways [3][4] - Coking Coal and Coke: Sideways with a Downward Bias [5][6] - Thermal Coal: Sideways with an Upward Bias in the Short Term, Supply Remains Loose in the Medium to Long Term [7] Core Views - Steel: Short - term positive factors are exhausted, and the steel market will maintain a sideways trend. The demand for steel still has resilience, and the fundamentals provide effective support [1]. - Iron Ore: The fundamentals provide strong support, and the iron ore price will move up in a sideways manner. In the long run, the supply - demand situation is relatively loose [3]. - Coking Coal and Coke: Market sentiment has cooled, and the coking coal and coke market will move down in a sideways manner. The supply of coke is tight, and the demand from downstream steel enterprises remains resilient [5][6]. - Thermal Coal: As the temperature rises in July, the daily consumption is increasing, and the downstream demand is strengthening. The coal price will move up in a sideways manner in the short term, while the supply remains loose in the medium to long term [7]. Market Analysis Steel - Futures and Spot: Steel futures declined slightly yesterday. The spot price was relatively firm, and the overall basis continued to widen. The spot transaction volume was 8740 tons. In early July, the average daily output of crude steel by key steel enterprises was 2.097 million tons, a 1.5% decrease from the previous period. The steel inventory was 15.07 million tons, a 2.4% decrease from the previous period. The average cost of billet in Tangshan was 2775 yuan/ton, with an average profit of 175 yuan/ton [1]. - Supply - Demand and Logic: This week's data shows that the output of building materials increased, consumption decreased, and inventory increased; the production and sales of hot - rolled coils increased, and inventory decreased. The demand for steel still has resilience, and attention should be paid to basis repair, policy implementation, overseas tariffs, and hedging funds [1]. Iron Ore - Futures and Spot: Iron ore futures prices trended slightly upwards yesterday. The prices of mainstream imported iron ore varieties rose slightly. Traders' enthusiasm for quoting was average, and steel mills mainly replenished their stocks as needed. The total transaction volume of iron ore at major ports was 1 million tons, a 1.48% decrease from the previous day; the total transaction volume of forward - delivery spot was 1.52 million tons, a 6.81% decrease from the previous day [3]. - Supply - Demand and Logic: Although the molten iron output has declined, it is still at a relatively high level. The consumption of iron ore shows good resilience. In the long run, the supply - demand situation is relatively loose. Attention should be paid to the consumption intensity of steel during the off - season and the changes in iron ore inventory [3]. Coking Coal and Coke - Futures and Spot: The futures prices of coking coal and coke trended downwards yesterday. The inventory of imported coal at ports was tight, and traders continued to hold up prices. Attention should be paid to port customs clearance and supply recovery [5]. - Supply - Demand and Logic: For coke, on the one hand, the price of raw coal remains high, and after the price increase is implemented, the profit of coke enterprises will improve, but the production willingness is still relatively conservative, and the supply remains tight; on the other hand, the profit of downstream steel enterprises is good, and the plant inventory is running at a low level, so the demand remains resilient. For coking coal, the market trading atmosphere is relatively active, and the downstream demand is stable. The supply is gradually recovering, but the overall recovery is limited. Attention should be paid to the coal mine recovery progress and the molten iron output of downstream steel mills during the traditional off - season [5][6]. Thermal Coal - Futures and Spot: In the production areas, some coal mines stopped production due to water accumulation and safety inspections, and mine owners were more willing to raise prices, with some coal varieties rising by 5 - 10 yuan. At ports, the upstream shipping cost increased, there was a structural shortage at ports, and the downstream rigid - demand procurement was completed stage by stage. As the high - temperature range expanded, the daily consumption increased, and traders were optimistic about the peak - season market, so the market coal price increased steadily. For imports, the price of high - calorie Australian coal was inverted compared with the domestic winning bid price, with low liquidity. The low - calorie Indonesian coal had obvious cost - performance advantages, and there were many downstream tenders [7]. - Supply - Demand and Logic: In July, as the temperature rises, the daily consumption is increasing, and the downstream demand is strengthening. The coal price will move up in a sideways manner in the short term. In the medium to long term, the supply remains loose. Attention should be paid to the consumption and inventory replenishment of non - power coal [7]. Strategies Steel - Unilateral: Sideways - Inter - period: None - Inter - variety: None - Futures - Spot: None - Options: None [2] Iron Ore - Unilateral: Sideways - Inter - period: None - Inter - variety: None - Futures - Spot: None - Options: None [4] Coking Coal and Coke - Coking Coal: Sideways - Coke: Sideways - Inter - period: None - Inter - variety: None - Futures - Spot: None - Options: None [6] Thermal Coal - No specific strategy information provided

Report Summary 1. Industry Investment Ratings - Iron ore: Neutral [3][4] - Coking coal: Bullish with fluctuations [7] - Coke: Neutral with fluctuations [7] - Other products: No specific ratings provided 2. Core Views - Steel prices are expected to remain volatile due to cost support and approaching domestic macro - policy window periods, with attention on off - season demand and inventory performance [1] - Iron ore shows a long - term supply - demand loosening pattern, but short - term price is boosted by coking coal destocking and improved market sentiment [3] - Coking coal prices are expected to be bullish with fluctuations in the short term, and coke prices will be neutral with fluctuations, with attention on post - safety - month production resumption and inventory changes [6][7] - Thermal coal prices will rise slightly in the short term due to supply contraction and expected demand increase, while the medium - to - long - term supply is still loose [8] 3. Summary by Related Catalogs Steel - Market Analysis: Yesterday, the rebar futures main contract closed at 2973 yuan/ton, and the hot - rolled coil main contract at 3103 yuan/ton. Steel inventory destocking paused except for rebar, and apparent demand slightly increased. Rebar production continued to rise this week with slight inventory destocking and stable off - season demand. Hot - rolled coil inventory increased month - on - month, with high production, facing challenges in exports and domestic consumption. Overall, cost support remains due to over - decline in coking coal and coke and safety - month inspections, and steel prices will remain volatile [1] - Strategy: No strategies are recommended for unilateral, inter - period, inter - variety, spot - futures, or options trading [2] Iron Ore - Market Analysis: Yesterday, the iron ore futures price rose slightly. The main 2509 contract closed at 705.5 yuan/ton, up 0.64%. Spot prices at Tangshan ports increased slightly. Daily average pig iron production was 242.29 tons, up 0.11 tons month - on - month. Total port iron ore trading volume was 87.2 tons, down 19.03%, and forward - contract trading volume was 130.6 tons, up 94.93%. Overall, supply is increasing during the shipping peak season, demand is slightly rising, and port inventory is slightly accumulating. In the short term, the price is boosted by coking coal destocking, while in the long term, the supply - demand is loose [3] - Strategy: A neutral stance is recommended for unilateral trading, and no strategies for other types [4] Coking Coal and Coke - Market Analysis: Yesterday, black - series products generally rose, with coking coal futures rising significantly. Coke inventory decreased as steel mills and coking plants increased restocking, and speculative demand also increased. Coking coal prices in northern main - producing areas rose steadily. Port prices were stable with little trading. Imported Mongolian coal prices rebounded due to supply decline, and some downstream coke enterprises increased purchases. Coke fundamentals are improving, and coking coal fundamentals are gradually getting better with supply decline and demand increase [5][6] - Strategy: Coking coal is expected to be bullish with fluctuations, and coke will be neutral with fluctuations. No strategies for other types [7] Thermal Coal - Market Analysis: In the producing areas, coal prices continued to rise steadily. Supply tightened as small and medium - sized mines completed monthly production tasks and stopped or reduced production. Metallurgical and chemical procurement demand was stable, and restocking demand was released. Port inventory decreased significantly, and market sentiment was positive. Import coal prices were stable, with medium - and low - calorie coal being cost - effective [8] - Strategy: No strategies are recommended [9]