Industry Supply and Demand and Market Performance
According to Securities Times on November 7, coal stocks continued to rise, with Baotailong and Zhengzhou Coal Electric Power closing at the daily limit of 10% in the afternoon. According to data from the General Administration of Customs, coal imports in October remained above 45 million tons for the fourth consecutive month, preparing for the winter demand peak.
Guotai Junan stated that under the pressure of downward demand in 2024, coal prices have shown unexpected resilience, and the fluctuation range of thermal coal prices may narrow in 2025, while coking coal is expected to recover with the help of downstream steel demand policy.
- A research report from Shanxi Securities says that the combined effect of the fourth-quarter policy efforts to stabilize the economy and heating demand is expected to create growth potential for industrial electricity consumption and non-electric coal consumption.
Industry performance
According to Securities Times DataBao, the performance of coal companies was polarized in the first three quarters of 2024, with some heavyweight companies performing better than expected, such as Zhengzhou Coal & Electricity's net profit turning profitable in the first three quarters, and nearly half of the coal companies' third-quarter performance showing significant improvement.
Flow of Funds
Since November, half of the coal companies have received increased holdings from the mainstream funds. Huaini Mining and Zhengzhou Coal Electricity have received relatively high net inflows from the mainstream funds. Eleven coal companies have received continuous net inflows from the mainstream funds for four days or more.
Industrial Green Transformation
According to Beijing News on August 8, the Blue Book on Social Responsibility of the Coal Industry (2024) revealed that in 2023, the national output of raw coal reached 4.71 billion tons, up by 3.4%. Of the 43 listed coal companies, 18 have established a complete ESG governance framework, and 25 have disclosed ESG and related reports separately, accounting for 58.14%.
Industry Regulation and Policy
On November 20, the National Development and Reform Commission issued a notice on doing a good job of signing and fulfilling medium-to-long-term coal contracts for 2025, specifying requirements such as contract signing and fulfillment targets, methods, duration, and pricing mechanisms.
- On November 21, it was announced that there will be two changes to the long-term coal contract policy for 2025, allowing for non-compliance with 100% of the contract throughout the year, and allowing coal mines to sign contracts for up to 75% of their production capacity instead of 80%.