According to Zhitong Finance APP, coal stocks are among the top gainers. As of the time of publication, Mongolian Coal (00975) rose by 3.69% to HKD 8.42; China Coal Energy (01898) increased by 2.85% to HKD 10.47; Yankuang Energy (01171) also rose by 2.85% to HKD 9.75; and China Shenhua (01088) climbed by 2.78% to HKD 37.6.
Founder Securities released a research report stating that the current tightening of the supply side in the coal industry has become an investment theme. The situation of coal supply exceeding demand is expected to gradually reverse, and coal prices are likely to continue to rise. As temperatures gradually increase across various regions, the electricity generation from thermal power is growing, leading to a rapid increase in daily coal consumption at thermal power plants. With the rise in coal demand, the coal supply-demand pattern may improve. Although this round of anti-involution is nominally about &#34;checking overproduction,&#34; the root cause of overproduction is still the low coal prices and the losses faced by coal companies leading to &#34;quantity for price.&#34; Therefore, coal prices must return to a reasonable level for the normal development of the coal industry, and future restrictions on imported coal can also be anticipated.
Guotai Junan believes that the impact of warm winter weather factors on total demand in Q1 2025 has passed. With the rapid recovery of total electricity consumption in society, coal demand for electricity has begun to recover with over 1% growth since May. At the same time, combined with the new energy policies &#34;430, 531,&#34; and against the backdrop of peak installed capacity for new energy, the first half of 2025 may become the period of greatest demand pressure in the next 3-5 years. Recently, the National Energy Administration has voiced the coal industry's &#34;anti-involution,&#34; while the realistic profit pressure on the market at a price of 650 yuan/ton is forcing production. Coupled with the certainty of reduced imported coal, total supply is expected to show a stable yet declining trend, and the bottom of the supply-demand fundamentals may have already emerged

601088

CSUAY

01088

00975

601898

01898

600188

01171

Coal stocks saw significant gains, with MONGOL MINING rising 3.69%, China Coal Energy rising 2.85%, YANKUANG ENERGY rising 2.85%, and CHINA SHENHUA rising 2.78%. Founder Securities pointed out that the coal industry's supply tightening is expected to lead to a rebound in coal prices, and the increase in thermal power demand will improve the supply-demand balance. Guotai Junan believes that there will be demand pressure in the first half of 2025, and the National Energy Administration emphasizes "anti-involution" in the coal industry, expecting total supply to stabilize with a slight decline

Zhitong

CSEC/China Shenhua

China Shenhua Energy

CHINA SHENHUA

MONGOL MINING

China Coal Energy

CHINA COAL

YANKUANG ENERGY

Understanding the Market | Coal stocks lead the gains as the market pays close attention to tightening industry supply. Institutions say that under the expectation of "anti-involution," coal prices are expected to return to reasonable levels