Coal stocks have accelerated their decline recently, according to market data. As of press time, Kinetic Development Group Ltd (HK: 01277) fell 3.69% to HK$1.695, China Shenhua Energy Co Ltd (HK: 01088) dropped 3.03% to HK$39, China Coal Energy Co Ltd (HK: 01898) declined 2.76% to HK$9.515, and Yankuang Energy Group Co Ltd (HK: 01171) slipped 2.67% to HK$10.22.
On the news front, the National Development and Reform Commission and other government departments had previously explicitly required Shanxi to accelerate the resumption of production at suspended coal mines. On October 20, the Shanxi Provincial Energy Bureau reported that as of now, 220 coal mines across the province have completed rectification and successfully resumed production, with raw coal output continuing to climb. Average daily output in September increased by approximately 220,000 tons compared to August, and daily production has been recovering at a faster pace since October.
It is worth noting that although thermal coal prices remain above 1,000 yuan per ton, market sentiment has begun to weaken. Mysteel data shows that on October 22, the port thermal coal market was operating in a "weak and stable" manner, with downstream inquiries sluggish, purchasing willingness low, and transactions difficult to conclude. China Merchants Securities previously pointed out that short-term downstream acceptance levels again deserve attention. As coal prices rise, power plant profitability comes under pressure, and at the trading level, this may temporarily suppress bullish expectations, which is the biggest disturbance for the sector at present.
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