The Zhitong Finance App learned that Zhongtai Securities released a research report saying that since July, the three-volt high temperature has led to an improvement in demand for electricity and coal during the peak season, and domestic supply continues to shrink due to continued safety supervision restrictions at major production sites. Inventories at Bohai Rim ports and coastal power plants have all declined and gradually begun to be eliminated compared to the previous period. Looking ahead to August, the demand side is expected to be strong and stable, growth is limited under supply-side rigid constraints, and Indonesian export coal sources are tight due to the drought, and coal prices are still gaining momentum. The bank believes that fundamentals and trading aspects resonate, and that it continues to be optimistic about investment opportunities in the coal sector, and suggests grasping the three main lines of coking coal, thermal coal, and dividends.
The main views of Zhongtai Securities are as follows:
Industry Watch: Port inventory removal has begun, and upward momentum in coal prices is accumulating
Port coal prices have been running at a standstill this week. Since July, with the arrival of three-volt hot weather, the country has gradually entered a real peak season for coal use, and demand for electricity and coal has improved; at the same time, safety restrictions on major production areas have continued, and domestic coal supply has continued to shrink. However, due to the fact that port inventories are still high, coal prices are stagnating at a high level. However, inventories at the Bohai Rim port and coastal power plants have all declined compared to the previous period, and inventory removal is gradually beginning. Looking ahead to early August, the hot weather will continue, and the daily consumption of power plants is expected to remain high during the peak season. Increased demand may drive further depletion of stocks in Beigang, and coal prices are still upward.
Demand side: The peak season just needs to continue. It is expected to strengthen and then stabilize in August
In early to mid-August, the country was still in a three-volt high temperature cycle, and the high temperature and humidity continued in places such as Jiangnan and South China. According to the Central Meteorological Observatory forecast, in the next 10 days, eastern Huanghuai, Jianghuai, northeastern Jiangnan, Xinjiang, central and western Inner Mongolia, southern Northeast China, southeastern North China, and the eastern Sichuan Basin will have 5-8 days of high daily high temperatures of 35-39℃, with local highs reaching 39-41℃; central Inner Mongolia, Liaoning, northern Shandong and other places will approach or break through historical extremes. As the nationwide electricity consumption load remains high, the daily consumption of terminal power plants will remain high during the peak season, and thermal power just needs to clearly support the market. After entering late August, with the arrival of the flood point, widespread hot weather across the country began to gradually subside, and residents' demand for refrigeration electricity declined marginally. Taken together, the demand side may show a strong and steady trend, but demand still exists during the peak season.
Supply side: Rigid constraints continue, incremental release is limited
1) Domestic safety supervision continues to be strict, and the release of incremental supply from production areas is limited. Towards the end of the month, some coal mines in the main production areas stopped production and increased maintenance after completing monthly production tasks. Market pessimism has abated as auctions in some coal mines have improved. At the same time, safety inspections are still under high pressure. Recently, four coal mines in Yulin City have been asked to stop production and rectification due to safety hazards, and the impact of supply contraction is gradually being transmitted to the middle and lower reaches. Specifically, new production safety regulations have been introduced in Shanxi, and overproduction in coal mines is strictly limited; safety inspections in Inner Mongolia are becoming stricter, and safety inspections are compounded by the “100-day operation” of mines, so it is unlikely that coal mine production will increase dramatically in the short term. The impact of the tightening of supervision brought about by the early coal mine safety accident has not completely subsided. Combined with the upgrading of safety control during the flood season in major production areas, safety inspections in the three regions of Jinshan, Shaanxi, and Mongolia have maintained a high-pressure state.
2) Indonesia's coal export sources are affected by the weather or are still tight, and the increase in China's coal imports may be limited. Although Indonesia plans to increase coal production quotas, due to policy restrictions and increased local demand, the sources of coal available for export are still tight. Furthermore, according to feedback from Indonesian mines, droughts have recently occurred in central Kalimantan and parts of Sumatra, with significantly less rainfall than the same period last year. Indonesia's coal industry is highly dependent on river transportation, particularly in the Kalimantan and Sumatra regions. Many local coal mines are landlocked and rely on barges to transport coal to coastal shipping facilities. Unlike major exporters, such as Australia, which mainly rely on railway networks, Indonesia's coal logistics system is closely linked to waterway conditions. At the peak of the dry season, falling water levels may slow barge transportation of coal from inland mining areas to export terminals. Indonesian President Prabowo held a conference on July 28 to study measures to deal with extreme weather and drought. In the future, attention should be paid to the potential impact of the drought on inland waterway transportation and coal exports in mining areas.
Inventory side: The trend of leaving the warehouse in Beigang is gradually showing
With the gradual release of demand during the peak season, Beigang's inventory decreased by about 1.655 million tons from week to week. Considering that it is still in the three-volt high temperature cycle in early to mid-August, the daily consumption of power plants is expected to remain high during the peak season, and the incremental release of superimposed supply is limited. It is expected that Beigang inventories will continue to degrade in the future, forming a certain support for port coal prices.
Investment idea: fundamentals and transactions resonate, ready to go, flexibility first
On the trading side, due to the excessive concentration of 2026Q2 fund holdings and the downward pullback in the highly elastic sector, the dividend style once again attracted financial attention, and the coal sector is still attractive for high dividends and undervaluation. Fundamentals, based on a positive judgment based on the domestic supply and demand pattern, combined with the escalation of geographical conflicts, the return of high oil prices to a high level to drive the release of alternative demand for coal and coal chemicals. Coal prices are expected to exceed expectations. Continue to be optimistic about investment opportunities in the coal sector, and grasp the three main lines:
① Focus on the impact of strengthened safety supervision on coking coal supply after the mine disaster. The rise in coking coal prices in the second half of the year is expected to drive profit release for listed companies. Focus on recommending Lu'an Huaneng, Huaibei Mining, Shanxi Coking Coal, and Pingmei shares. Panjiang Co., Ltd., Shanghai Energy, and Shenhuo Co., Ltd. are expected to benefit;
② Demand for “peak summer” and “peak winter” continued to be released in the second half of the year, and the upward shift in thermal coal prices increased with certainty, focusing on highly elastic Yankuang Energy A+H, Yancoal Australia, Haohua Energy, Jinkong Coal, Shanmei International, Guanghui Energy, Shaanxi Coal. Xinji Energy, China Coal Energy A+H, Power Investment Energy, Huayang Co., Ltd. is expected to benefit;
③ Based on the continued entry of medium- to long-term capital into the market, the “high dividend and undervaluation” investment value of coal has been further highlighted, and targets with strong dividend attributes such as China Shenhua A+H and Huaihe Energy have been actively allocated.
Thermal coal data tracking: the last thermal coal price in Jingtang Port increased by 1 yuan/ton from week to week
On the supply side, as of July 31, 2026, the 462 sample mines produced an average of 5.294 million tons of thermal coal per day, up 1.36% from week to week, down 3.29% year on year. On the demand side, as of July 30, 2026, the combined daily coal consumption of 25 provinces was 5.939 million tons, an increase of 11,000 tons over the previous week, an increase of 0.19% over the previous week, and a decrease of 1.30% over the previous year. In terms of port prices, as of July 31, 2026, the liquidation price of Jingtang Port Coal (Q5500) produced in Shanxi was 831 yuan/ton, up 1 yuan/ton from last week, up 0.12% from last week. Compared with the same period last year, it increased 160 yuan/ton, and a year-on-year increase of 23.85%.
Coking coal and coke data tracking: main coking coal prices in Jingtang Port remained flat from week to week
On the supply side, as of July 31, 2026, the daily refined coal output of the 523 sample coal mines and the daily refined coal output of the 314 sample coal washing plants were 639,700 tons and 22.1 million tons, respectively. The weekly ratio was -1.22% and -0.54%, respectively, and -16.28% and -13.16%, respectively. On the demand side, as of July 31, 2026, 247 steel companies produced 2.356 million tons of iron per day, down 0.90% from week to week and 2.14% year on year. In terms of origin prices, as of July 31, 2026, the Liulin high sulfur/low sulfur main focus price index (tax included) was 1,690 yuan and 1980 yuan/ton, respectively. Compared with the previous week, it remained flat and flat from week to month, respectively. Compared with the same period last year, it rose 440 yuan/ton and 480 yuan/ton, respectively, and increased by +35.20% and +32.00% year on year. In terms of port prices, as of July 31, 2026, the price increase (tax included) of the main coking coal depot in Jingtang Port was 2,090 yuan/ton. Compared with last week, the price increase was flat from week to week. Compared with the same period last year, the increase was 410 yuan/ton, and the year-on-year increase was 24.40%.
Risk Alerts
Policy price limit risk; coal import volume; macroeconomic stagnation and decline; risk of trustworthiness of third-party data due to factors such as data acquisition methods and processing methods; and risk of untimely updates to research and use information.