中国材料 - 反内卷调研之旅-China Materials-Anti-Involution Trip Day 3

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call was on the coal industry in Shanxi, China [1] - The coal market has experienced a price rebound in July and August, but profitability remains an issue for many mines [1] Core Insights - Approximately 40-50% of state-owned enterprise (SOE) coal mines are still operating at a loss, with loss-making coking coal mines accounting for about 20% of industry capacity [1] - Following an overproduction inspection in July, coal production from sampled mines has decreased by 5%, contributing to a rise in thermal coal prices to over Rmb700/ton by late August [3] - Despite the expected decline in supply towards year-end, a significant drop is not anticipated due to the need for coal during the winter heating season [3] - Thermal coal prices are projected to fluctuate between Rmb640-700/ton, indicating limited downside potential [3] Demand and Supply Dynamics - Total coal demand is expected to increase by 1-2% year-on-year in 2025, driven by higher thermal power demand due to extreme temperatures and a colder winter forecast [4] - The steel and cement industries are identified as major factors dragging down overall coal demand [4] - Coal imports are projected to decline to 360-370 million tons in 2025, down from 420 million tons in 2024, with a 14% year-on-year decrease noted in the first seven months of 2025 [5] - Increased imports from Indonesia are expected, but overall imports will continue to decline due to India's preference for higher calorific value coal [5] Regional Insights - The potential for increased coal volume from Mongolia is limited by port inventory capacity and demand in China [6] - Mongolian coal is not a substitute for Shanxi coking coal due to its lower strength, primarily serving as blended coal for coke production [7] Additional Considerations - The report indicates that the coal industry is currently viewed as attractive by Morgan Stanley [9] - The insights provided are based on comprehensive data and analysis, reflecting the current state and future outlook of the coal industry in Shanxi [1][3][4][5][6][7][9]