SHCI(SH:601225)2025-11-24 01:46Summary of Conference Call on 2026 Electric Coal Long-term Contracts Industry Overview - The conference focuses on the electric coal industry, specifically the long-term contract policies for electric coal in the Shanxi, Shaanxi, and Inner Mongolia regions of China [1][2][3]. Key Points and Arguments 1. Price Mechanism Adjustments: The 2026 electric coal long-term contract price mechanism allows enterprises to negotiate monthly prices based on market indices, with a price range set between 320 to 520 RMB/ton for the Shanxi, Shaanxi, and Inner Mongolia regions [2][3]. 2. Demand Forecast: It is anticipated that electric coal demand will decline slightly in 2026 due to the impact of renewable energy, leading to reduced operating hours for thermal power generation [1][6]. 3. Supply Chain Stability: Coal mines benefiting from supply guarantee policies must fully sign contracts for increased production capacity. Mines that fail to complete the necessary procedures by the end of 2025 will revert to original capacity, affecting contract fulfillment and supply chain stability [1][5]. 4. Third-party Participation Restrictions: Shaanxi province does not support third-party companies in electric coal transactions, requiring all contracts to be signed directly between mines to enhance compliance and transaction transparency [1][7]. 5. Production Capacity Management: The Shaanxi government plans to manage small and medium-sized coal mines through mergers and upgrades, targeting a production capacity increase to 8 billion tons by 2025 and 8.5 billion tons by 2030 [3][11]. 6. Impact of Environmental Regulations: Safety and environmental inspections may hinder the completion of production targets, with Shaanxi likely unable to meet its 8 billion tons target this year [6][12]. 7. Market Price Trends: The overall market price for coal is expected to remain stable with limited upward momentum, potentially leading to a downward trend in the coming months [6][20]. 8. State Control on Overproduction: The government is strictly controlling overproduction to stabilize market prices, especially in light of recent price declines [12][20]. 9. Differential Impact on Enterprises: State-owned enterprises have shown more compliance in completing capacity increase procedures compared to private enterprises, which face challenges in the current market environment [13][16]. 10. Future Production Outlook: The Shaanxi government aims for a steady increase in coal production, with a projected annual growth rate of around 2% [11][20]. Additional Important Insights - Coal Price Adjustments: There are discussions about adjusting the price range for coal in the three provinces to reflect rising production costs, with suggestions to raise the lower limit by 50 RMB [20][21]. - Long-term Contract Benefits: State-owned enterprises are expected to benefit more from long-term contracts compared to private enterprises, especially if coal prices fall below contract prices [16][20]. - Transition to Renewable Energy: The dual carbon policy and the shift towards renewable energy sources are expected to gradually reduce coal consumption, although thermal power generation will still play a crucial role [20]. This summary encapsulates the critical discussions and insights from the conference call regarding the electric coal industry and its future outlook.