Shanxi Securities: September coal prices remain stable, optimistic about investment opportunities in the sector in the fourth quarter

According to the Zhitong Finance APP, Shanxi Securities released a research report stating that coal prices experienced fluctuations due to significant events at the beginning of September. Subsequently, supply and demand returned to normal, and coal prices rebounded to varying degrees, showing relatively stable performance from a monthly perspective. Among them, thermal coal prices were relatively more stable, while coking coal saw stronger pig iron production with greater price volatility. With the policy shift driven by anti-involution, domestic raw coal production contracted. Although the contraction continued to show a mild trend in September, after the implementation of anti-involution related policies, production was relatively controlled. During the peak summer season, coal prices rose unexpectedly, but after the apparent resolution of long-term contract inversions, some long-term contract ratios still failed to materialize, so sales recovery may continue into the fourth quarter.

The main points of Shanxi Securities are as follows:

Supply: From January to September, raw coal supply showed marginal decline. In the first nine months of 2025, the cumulative raw coal production reached 3.57 billion tons, a year-on-year increase of 2.0%, with the year-on-year growth rate declining marginally. In September, production reached 412 million tons, a year-on-year decrease of 1.8% and a month-on-month increase of 5.38%.

Demand: From January to September, terminal demand was supported by manufacturing and infrastructure. In the first nine months of 2025, fixed asset investment decreased by 0.5% year-on-year, with manufacturing investment increasing by 4.0%, infrastructure investment increasing by 1.1%, and real estate investment decreasing by 13.9%. In the first nine months of 2025, the cumulative growth rate of thermal power was -1.2%; coking coal was 3.5%; pig iron was -1.1%; cement was -5.2%; in September, the growth rate of thermal power was -5.4%; coking coal was 8.0%; pig iron was -2.4%; cement was -8.6%.

Imports: In September, coal imports increased month-on-month, while the import volume maintained a contraction trend from January to September. In the first nine months of 2025, the cumulative import volume reached 34.6 million tons, a year-on-year decrease of 11.1%. In September, the import volume was 46 million tons, a year-on-year decrease of 3.34% and a month-on-month increase of 7.64%.

Prices: In September, coal prices were stable with a slight increase, while coking coal prices decreased slightly. Since 2025, although the average prices of Shanxi premium mixed 5500 thermal coal, Beijing-Tangshan port premium coking coal, and Tianjin port secondary metallurgical coke have adjusted, the average prices of the three varieties in September showed differentiation. In September, the month-on-month increase for each variety was thermal coal > coking coal > coke.

Coal prices were relatively stable in September. At the beginning of September, coal prices experienced fluctuations due to significant events. Subsequently, supply and demand returned to normal, and coal prices rebounded to varying degrees, showing relatively stable performance from a monthly perspective. Among them, thermal coal prices were relatively more stable, while coking coal saw stronger pig iron production with greater price volatility.

Domestic supply continues to contract, and imported coal contributes elasticity. With the policy shift driven by anti-involution, domestic raw coal production contracted. Although the contraction continued to show a mild trend in September, after the implementation of anti-involution related policies, production was relatively controlled. The unexpected rise in coal prices driven by domestic supply contraction also boosted coal import demand, leading to a continued increase in imported coal in September. If coal prices stabilize and rebound in the future, it may continue to drive demand for imported coal.

Investment advice: Optimistic about investment opportunities in the coal sector in the fourth quarter, with elastic coal varieties ranked higher. Fourth quarter performance may be better than the third quarter, and the sector has allocation value. During the peak summer season, coal prices rose unexpectedly, but after the apparent resolution of long-term contract inversions, some long-term contract ratios still failed to materialize, so sales recovery may continue into the fourth quarter With the implementation of "anti-involution" related policies, the expected increase in domestic coal supply in the fourth quarter is limited, providing some downward support for coal prices. As the peak winter demand approaches in the fourth quarter, demand is expected to rise, and the average price is also expected to recover to some extent on a month-on-month basis.

In terms of targets, the overall valuation of the sector is already relatively low, and the recent market style switch has increased demand for coal, which has the potential for a rebound. The sector can be increased on dips, with a focus on elastic varieties. Pay attention to Jinkong Coal Industry (601001.SH), Shanmei International (600546.SH), and Huayang Co., Ltd. (600348.SH). In terms of coking coal, the demand expectations for September and October are good, and if there are supply disruptions, prices may rebound beyond expectations. Pay attention to Lu'an EED (601699.SH) and Shanxi Coking Coal (000983.SZ).

Risk Warning: Supply contraction may be less than expected, demand recovery may be less than expected, significant increase in imported coal, and related companies' performance may be less than expected