Coal stocks are under pressure, Hidili Industry (01393) and Huili Res (01303) fell more than 9%, China Coal Energy (01898) fell 5.19%, Yancoal Aus (03668) fell 3.03%, and China Shenhua Energy (01088) fell 2.76%.
In terms of news, in the coking coal sector, GTJA pointed out that there may be pressure for price adjustments in the off-season, but greater elasticity is expected to occur during the "Golden September and Silver October" period. The bank takes into account that starting in the second half of 2023, new construction of real estate may narrow the decline based on previous land acquisition, and at the same time, with the support of 3.9 trillion yuan for special bonds and trillions of yuan for special national bonds in 2024, infrastructure construction is expected to achieve physical work volume, and the expected decline in demand in the off-season may be limited and may see a significant increase in demand in the autumn. Current coal production growth in Shanxi seems lower than expected, and under the primary consideration of safety production, the supply side may lack elasticity, which may be another catalyst for the market trend. The bank expects that the turning point of coking coal prices may occur at the transition between the off-season and peak season in August and continues to be bullish on price elasticity in the fourth quarter.
Cinda Securities stated that it continues to be fully bullish on the coal sector and pays attention to the historic configuration opportunities for coal. It focuses on: first, the Shanxi Coal Industry and Shanxi Coking Coal Energy Group, which have large potential for endogenous and exogenous growth and superior resource endowments; second, China Shenhua Energy and China Coal Energy, which are central enterprises in the coal industry with great potential for asset value revaluation under central reform policies; third, high-quality metallurgical coal companies such as Pingdingshan Tianan Coal Mining and Shanxi Coking Coal Energy Group with special and scarce global resources; and fourth, smokeless coal companies such as Shanxi Huayang Group New Energy, which can be used for metallurgical injection coal.