According to a report from Zhitong Finance, coal stocks advanced in the late morning session. As of press time, China Shenhua (01088) gained 3.85% to HK$43.72; China Coal Energy (01898) rose 3.55% to HK$10.51; Kinetic Development (01277) climbed 2.46% to HK$1.875; and Yankuang Energy (01171) added 1.76% to HK$11.59.
On the news front, coal inventories at power plants in India have fallen to near their lowest level in five years. Plants accounting for more than 40% of the nation's coal-fired generation capacity currently hold only enough coal for four days or less, raising the risk of widespread power outages. In addition, Indonesia, the world's largest coal exporter, saw its monthly coal export volume hit a five-year low.
Zheshang Securities said in a research note that coal prices will continue to fluctuate at elevated levels, and it is bullish on the coal sector in the fourth quarter. With a tight supply-demand balance and value re-rating taking hold, the coal sector is facing historic investment opportunities. Guotai Haitong Securities stated that stable production and supply-guarantee policies have been further strengthened, but the release of additional supply in the short term may be relatively limited.
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