Hong Kong Stock Concept Tracking | Coke Starts the Seventh Round of Price Increases! Institutions Claim Coal Prices May Have Reached Yearly Low (Including Concept Stocks)

According to Zhitong Finance APP, the seventh round of price increases is here! In Shandong province, multiple markets plan to raise the price of coke, including Weifang, Binzhou, Dezhou, Jining, Zaozhuang, Heze, Rizhao, Tai'an, and Linyi. The price of damp coke will be raised by 50 yuan/ton, dry coke by 55 yuan/ton, and top-loaded coke by 75 yuan/ton, effective from 0:00 on August 19. This price increase is led by local coke enterprises in Shandong, aiming to respond to changes in market supply and demand. Shanxi Securities pointed out that the coal market pricing in July was "beyond expectations," and the low point for the year may have already appeared. The elasticity space brought by the anti-involution policy has raised the inflation level, with a relatively mild increase in thermal coal and a stronger trend in coking coal. It is expected that the low point for coal prices has been reached this year, and prices are unlikely to fall back in the second half of the year. The anti-involution continues to ferment, and coal stocks may show a slight upward or fluctuating trend, with thermal coal accelerating upward and elasticity repairing.

Specifically, from the supply side, the marginal supply of raw coal has decreased from January to July.

From January to July 2025, the cumulative output of raw coal reached 2.779 billion tons, a year-on-year increase of 3.8%, with the year-on-year growth rate marginally declining. In July alone, the output was 381 million tons, a year-on-year decrease of 3.8% and a month-on-month decrease of 9.52%.

From the demand side, from January to July, terminal demand was supported by manufacturing and infrastructure, with improvements in electricity demand.

From January to July 2025, fixed asset investment increased by 1.6% year-on-year, with manufacturing investment up 6.2%, infrastructure investment up 3.2%, and real estate investment down 12.0%. From January to July 2025, the cumulative growth rate of thermal power was -1.3%; coking coal was 2.8%; pig iron was -1.3%; cement was -4.5%; in July, the growth rate of thermal power was 4.3%; coking coal was 0.5%; pig iron was -1.4%; cement was -5.6%. Imports: Coal imports increased month-on-month in July, while the import volume maintained a contraction trend from January to July. From January to July 2025, the cumulative import volume reached 25.7 million tons, a year-on-year decrease of 13.0%. In July alone, the import volume was 35.61 million tons, a year-on-year decrease of 22.94% and a month-on-month increase of 7.79%.

In July, the market had expectations for price increases, but the market pricing was "beyond expectations." The exceeding expectations stemmed from the elasticity space brought about by the policy shift after the "anti-involution," with the ultimate goal of raising the inflation level. The fundamentals in July were relatively supportive, with a relatively mild increase in thermal coal and a stronger trend in coking coal. The fundamental trends have not exceeded market expectations, but the market began to adjust summer price expectations at the end of July, leading to a significant increase in coal stock prices. In August, the market, after raising expectations, became more focused on policy implementation and supply-demand conditions. At this stage, both the industrial market and the financial market have increased sensitivity to positive factors, paying attention to the acceleration of price increases. It is expected that the low point for coal prices has been reached this year, and prices are unlikely to fall back in the second half of the year.

The "mild storm" brought about by the anti-involution. In the coal sector, anti-involution does not equate to supply-side reform, and the expected impact will be milder than that of supply-side reform. On one hand, coal has not entered the top ten restricted production industries; on the other hand, the current industry has not triggered debt risks. In the future, in addition to measures such as limiting overproduction and upgrading safety supervision, previously pre-approved capacity increases may be reduced, leading to expectations of contraction in both capacity and output. Although this round of anti-involution has not specifically mentioned coal, there is a certain "follow-the-trend" behavior on the industrial side, and attention to this tendency may trigger a "mild storm." From the perspective of the secondary market, the coal sector performed strongly last week, which the market interpreted as a return of the "re-inflation logic." However, when considering the policy background and pricing characteristics, the core driving force behind the rise in coal stocks is not the systematic increase in commodity prices, but rather the repricing of high-dividend assets. This logic is further reinforced by the implementation of social security contribution policies and the revitalization of state-owned real estate, while "bottom-line thinking" has become a potential uncertainty variable.

The upward trend of coal stocks is not a return of the "re-inflation trade." The premise of the re-inflation trade is that policies drive the PPI to rebound, triggering an upward movement in commodity prices through supply-side contraction or demand stimulation, thereby driving the valuation and profit recovery of cyclical sectors. High-dividend trading, on the other hand, is established in a stable or even mildly declining commodity price environment, where the market places more emphasis on the contribution of corporate cash flow and dividend yield to investment returns. From a policy perspective, the recent rise in coal stocks aligns more with the latter logic. The recent policy focus of the State Council is on "anti-involution" and "expanding domestic demand," emphasizing the optimization of resource allocation through the construction of a "national unified market." This is fundamentally different from the market's expectation of a 2016-style policy of "forcing capacity reduction to boost PPI." Therefore, the current rise in coal stocks is not based on the logic of cyclical recovery, but rather benefits from factors such as the slowing downward slope of commodity prices, stable cash flow, and improved investment cost-effectiveness of dividend returns.

The dividend attractiveness of the coal sector has significantly increased, with funds "exchanging interest for risk." In the context of low-risk interest rates and a stable bond market, the current dividend advantage of coal stocks is particularly prominent: the average industry dividend yield for 2024 exceeds 5%, with some leading companies even reaching over 10%, far exceeding government bond yields and most dividend assets. This endows coal stocks with a natural "dividend substitute" attribute. In fact, similar signals have also emerged in the overall market style over the past week: strong performance in bank stocks, rebounds in small and mid-cap stocks, and rising low-volatility dividends in Hong Kong stocks all reflect a return of fund preferences to a defensive logic of "visible cash flow and dividends covering risks."

Zhongtai Securities stated that the rise in the coal sector last week was not a return of the "re-inflation trade," but rather the result of the repricing of high-dividend assets. In the context of low-risk interest rates and policies reinforcing the visibility of cash flow, the high dividend yield of 5%-10% for coal stocks significantly enhances their investment attractiveness. The social security contributions and state-owned asset revitalization policies further strengthen this logic: the former stabilizes the cost side to suppress significant fluctuations in PPI, while the latter enhances the allocation value of high-dividend assets by improving the fiscal environment. The current market places more emphasis on dividend returns rather than cyclical elasticity, and defensive allocations under "bottom-line thinking" have become the preferred choice for funds.

Related concept stocks:

China Shenhua (01088): The company has abundant coal mine resource reserves, concentrated distribution, and both resource retention and recoverable reserves rank among the top in the country. As of 2024, the company's total coal resource reserves amount to 3.44 billion tons, with recoverable reserves of 1.51 billion tons. In 2024, the company's coal production is 327 million tons, and self-produced coal sales are 330 million tons, ranking first in the industry, with a coal mining lifespan of up to 41 years. At the same time, the company has completed the acquisition of Hanjin Energy, the acquisition project of Dayan Mining is in progress, and it is actively promoting exploration and mining of new mines, with further capacity expansion expected in the future At the same time, the company's long-term contracts (monthly + annual) account for over 87%, effectively smoothing out coal price fluctuations and reducing operational risks, resulting in resilient performance growth.

China Coal Energy (01898): The company has abundant coal resources, ranking third among listed coal companies in terms of retained coal resource volume and second in terms of retained recoverable coal reserves, with 94.8% of recoverable reserves concentrated in the core coal-producing regions of Shanxi, Shaanxi, and Inner Mongolia. Additionally, the company holds a leading market share in the industry, with approved production capacity of 165 million tons in operating coal mines and equity production capacity of 144 million tons. From 2018 to 2024, the company's coal production and sales volume is expected to grow from less than 80 million tons to nearly 140 million tons, and there are currently 6.4 million tons of capacity under construction at the Libim Mine and Wezigou Mine, expected to begin trial operations by the end of 2025, with further capacity increases anticipated.

Yankuang Energy (01171): The company plans to produce 155-160 million tons of commercial coal and 8.6-9 million tons of chemical products by 2025; the sales cost per ton of coal is expected to decrease by 3% year-on-year; and the debt-to-asset ratio is expected to drop below 60% year-on-year. The capital expenditure plan is 19.545 billion yuan. The company's Wanfeng Coal Mine has already begun joint trial operations by the end of 2024, the Wucaiwan No. 4 Coal Mine is scheduled to start production in 2025, and the Liu Sangedan and Galutu coal mines have received geological report approvals. The Hohhot No. 1 Coal Mine has completed preliminary design, and these projects are expected to bring nearly 50 million tons of capacity increase to the company