According to a research report, while coal prices have seen a recent decline, the overall market supply and demand is expected to shift from loose to "balanced and tight" by 2026, with the price center likely to rise. The annual average market price for 5,500 kcal thermal coal at Qinhuangdao port is projected to be between 800-900 yuan per ton, higher than the 2025 average of 693 yuan per ton. The report suggests focusing on two key areas. First, targets with high price elasticity to capture aggressive opportunities from earnings and valuation recovery. Against the backdrop of an anti-internal competition policy driving the coal price center higher, companies with a high proportion of spot sales, low-cost advantages, and potential for capacity growth are poised to lead in earnings and valuation recovery as the supply-demand structure improves. Second, leading companies with resource reserves, cost advantages, and high dividend commitments to obtain the defensive value of stable returns.
China Galaxy Securities Co., Ltd. presents the following main points. Domestic coal production and imports declined in May. In May 2026, national coal production and imports were 397 million tons and 33.27 million tons respectively, representing year-on-year decreases of 1.7% and 7.7%. For the period from January to May 2026, national coal production and imports totaled 1.98 billion tons and 183 million tons, down 0.3% and 3.2% year-on-year respectively. The drop in domestic production in May was primarily due to a coal mine accident in Shanxi, which triggered nationwide safety rectification actions. As a major production region, Shanxi's output fell significantly by 7.1% year-on-year in May, leading to production cuts in regions like Guizhou and Ningxia due to intensified safety inspections. The decline in coal imports in May was mainly because international coal prices were temporarily high, coupled with rising shipping costs, creating a price inversion where imported coal was more expensive than domestic coal, dampening traders' purchasing enthusiasm.
Market coal prices in June showed a pattern of peaking early and declining later, primarily due to the gradual easing of supply constraints and a sequential drop in daily power plant consumption. As of June 26th, the ex-ship price for 5,500 kcal thermal coal at Qinhuangdao port was reported at 835 yuan per ton, down 25 yuan per ton from the beginning of the month but still up 217 yuan per ton year-on-year. On the supply side, frequent news of ensuring supply for the summer peak demand period emerged in mid-to-late June, and previously idled mines resumed operations, leading to a steady recovery in domestic raw coal supply. On the import front, a sharp drop in international oil prices in late June brought down shipping costs and international coal prices simultaneously, repairing the inversion pattern and improving the cost-effectiveness of imports. On the demand side, high temperatures arrived early in many parts of the country in early to mid-June, causing a surge in residential cooling load. Combined with weak hydropower and new energy output in early summer, the pressure on thermal power to provide a baseload increased significantly. Power plants replenished inventories ahead of the peak season, and rigid demand drove coal prices higher. However, by late June, increased rainfall in many southern regions eased the heat, hydropower output recovered, squeezing thermal power generation space, and daily power plant consumption declined sequentially. Simultaneously, after concentrated inventory replenishment, end-users had ample stocks, and willingness to hoard coal at high prices was low among enterprises, leading to a cooling of market transactions and directly driving the price correction.
Risk warnings include the potential for a significant macroeconomic downturn, the risk of a sharp decline in coal prices, risks from industry policy adjustments, the risk of intensified safety supervision, and the risk of accelerated substitution by other energy sources.
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