Minsheng Securities: Coal prices continue to rise, short-term momentum may pause, and pricing power builds for the peak season

According to Zhitong Finance APP, Minsheng Securities released a research report stating that coal prices at ports continued to rise last week, with a slight slowdown in the upward trend in the latter half of the week. Reviewing this round of coal price increases, the core driver is the supply contraction caused by production inspections, resulting in an unexpected rebound during the transition period of electricity coal demand in October. Since July 2025, the month-on-month decline in national raw coal production has reached 3.8%/3.2%/1.8%, and with the inspection team entering in November, expectations for supply-side contraction are expected to strengthen further. In terms of sectors, with improved supply and demand, rebounding coal prices, and higher elasticity for high spot ratio targets, it is recommended to pay attention to Shanxi targets, which have completed overproduction governance in 2024 and are minimally affected by the current "overproduction restrictions."

The main points of Minsheng Securities are as follows:

Coal prices continue to rise, short-term momentum may pause, preparing for peak season price increases

Last week, coal prices at ports continued to rise, with a slight slowdown in the upward trend in the latter half of the week. Reviewing this round of coal price increases, the core driver is the supply contraction caused by production inspections, resulting in an unexpected rebound during the transition period of electricity coal demand in October. Looking ahead, following the report on overproduction inspections in Inner Mongolia, the Ministry of Emergency Management will begin safety production assessment inspections in November; the Shaanxi Provincial Emergency Management Department has issued a document requiring that "major hidden dangers identified during inspections assigned by higher authorities must be dynamically cleared by the end of October according to the five implementation requirements"; recent safety and environmental inspections in production areas have also become stricter. Since July 2025, the month-on-month decline in national raw coal production has reached 3.8%/3.2%/1.8%, and with the inspection team entering in November, expectations for supply-side contraction are expected to strengthen further.

On the demand side, with temperatures in the south dropping, daily consumption at power plants is about to bottom out and enter an upward channel. Recently, some areas in the north have started heating early, and by mid-November, the north will fully enter the heating season, marking the beginning of the peak demand season. At that time, combined with safety production assessment inspections, supply may further contract, providing more momentum for coal price increases. In the short term, the current shipping cost inversion is severe, and after the maintenance of the Daqin Line ends, the increase in port arrivals may be limited, making the possibility of coal price declines low. During the transition period of demand, the speed of price increases may slow down, but as the peak winter demand is released, it is expected that coal prices may return to above 900 yuan/ton by the end of the year.

In terms of sectors, with improved supply and demand, rebounding coal prices, and higher elasticity for high spot ratio targets, it is recommended to pay attention to Shanxi targets, which have completed overproduction governance in 2024 and are minimally affected by the current "overproduction restrictions."

Supply disturbances intensify, coking coal prices run strong

Last week, most open-pit mines in the Wuhai area were shut down due to slope management and resource restructuring, coupled with stricter environmental inspections, affecting production declines. Additionally, in the Linfen and Lüliang areas of Shanxi, more coal mines have reduced production due to relocation work, safety, and maintenance factors, tightening supply again; next week, the second round of price increases for coke will be implemented, with further price increase expectations, and pig iron production remains relatively high, indicating that short-term demand for coking coal is still present. Under the mismatch of supply and demand, there is still upward space for coking coal prices.

Investment recommendations

In terms of targets, the following investment lines are recommended: 1) High spot ratio elastic targets, recommended to pay attention to Lu'an EED (601699.SH) and Yanzhou Coal Mining (600188.SH). 2) Steady performance and growth-type targets, recommended to pay attention to Jinkong Coal Industry (601001.SH) and HYGF (600348.SH) 3) Production recovery growth, it is recommended to pay attention to Shanmei International (600546.SH). 4) The performance of industry leaders is stable, it is recommended to pay attention to China Shenhua (601088.SH), China Coal Energy (601898.SH), and SHCI (601225.SH). 5) Benefiting from the growth of nuclear power, strong α scarce natural uranium targets, it is recommended to pay attention to CGN Mining (01164).

Risk Warning

1. Downstream demand is lower than expected; 2) Coal prices fall sharply; 3) Policy change risks