East Money Securities released a research report stating that China's coal output from January to September 2025 increased by 2% year-on-year (YoY). However, following the issuance of the National Energy Administration's Document No. 108 in July, coal production declined significantly, with July, August, and September recording YoY drops of 3.8%, 3.2%, and 1.8%, respectively. Notably, output reductions were pronounced in Shanxi and Xinjiang.
On the import front, after hitting a record high in 2024, coal imports in 2025 saw a decline. From January to September 2025, cumulative imports stood at 346 million tons, down 11.1% YoY.
With the deepening of "anti-internal competition" policy logic and the introduction of capacity verification measures by the National Energy Administration, coal prices have found a firmer bottom. Coupled with limited growth in new coal mine capacity, the sector is expected to enter a long-term upward cycle.
**Key Insights from East Money Securities:**
**Coal Supply:** - **Domestic Supply:** Output in Q3 2025 contracted marginally YoY. Shanxi, Inner Mongolia, Shaanxi, and Xinjiang produced 329 million, 309 million, 203 million, and 123 million tons, respectively, with Xinjiang seeing a 12.3% quarterly decline. - **Imports:** Indonesia’s coal imports fell 15% YoY (14.3 million tons) due to weak import margins and rising production costs. Mongolia’s imports rose 2.1% YoY (6.192 million tons), but coking coal imports dropped 3.8% (4.175 million tons).
**Coal Demand:** - **Thermal Power:** Weak short-term demand due to slowing electricity consumption and renewable energy substitution. Thermal power generation fell 1.2% YoY (4.6969 trillion kWh), with monthly declines in March, April, and September. - **Steel:** Resilient demand and improved profitability. Crude steel output remained high (230–240 million tons), with key steel enterprises reporting a 1.9x YoY profit increase (96 billion yuan). - **Chemicals:** Demand remained strong but growth slowed. Weekly coal consumption averaged 6.9 million tons (+12.7% YoY). - **Building Materials:** Demand declined (-4.6% YoY) but showed improvement compared to 2024 (-9.1% YoY).
**Anti-Internal Competition Policy:** The policy aims to curb overcapacity and stabilize coal prices by regulating output. This could accelerate the sector’s upward inflection point.
**Stock Recommendations:** 1. **Dividend Plays:** China Shenhua (601088.SH), Shaanxi Coal (601225.SH), China Coal Energy (601898.SH), SDIC Power (002128.SZ). 2. **Thermal Coal Leverage:** Yankuang Energy (600188.SH), Jin Coal (601001.SH), Shan Coal (600546.SH). 3. **Coking Coal:** Lu’an Environmental (601699.SH), Pingmei (601666.SH), Huaibei Mining (600985.SH), Shanxi Coking (000983.SZ). 4. **Coal Machinery:** ZCZL (00564), Tiandi Tech (600582.SH).
**Risks:** Downstream demand slowdown, supply stabilization policies, safety regulations, and geopolitical impacts on exports.
Comments