STOCKS | Coal Prices Near Key Threshold Amid Market Concerns

On April 20, Jin10 reported that Du Cong, the chief coal analyst at Zhongtai Securities, released a research report addressing market concerns over the potential collapse of coal prices due to the reopening of the Taiwan Strait. According to Jin10, data indicates that mid-April saw the market price of thermal coal reach 769 yuan per ton, approaching the critical 800 yuan mark, with a weekly increase of 8 yuan. Coking coal prices rose by 70 yuan per ton weekly, driven by strong non-electricity demand. The demand side shows a dual resonance between electricity and non-electricity sectors: off-season power coal consumption increased by 7% year-on-year, daily steel iron production averaged 2.45 million tons, and weekly coal consumption in coal chemical industries reached 7.5 million tons, up from 7 million tons last year. Additionally, reduced output from hydropower and renewable sources has bolstered thermal power support. In terms of inventory, power plant stocks decreased by 0.6% year-on-year, reaching a three-year low, while port and coking coal inventories plummeted by 15.8% year-on-year, indicating a supply-demand shift favoring sellers. Despite this, stock prices have not risen in tandem with coal prices, as market expectations remain anchored at 800 yuan per ton. Should there be a significant weekly increase of 30 yuan or a breakthrough beyond 800 yuan, stock prices may rebound quickly, presenting a golden window for investment.