The Zhitong Finance App learned that Open Source Securities released a research report saying that currently coal prices have entered an upward stage, and the market is gradually shifting from peak season demand to supply contraction. “Overproduction checks” and stricter safety regulations limit the release of production in major production areas, and it will still take time for supply to recover; as winter storage begins and the peak heating season approaches, the fundamentals of coal supply and demand are expected to improve further. Thermal coal benefits from rising spot prices and the stabilizing effect of long-term cooperation mechanisms on industrial chain profits; coking coal is more marketable, more sensitive to changes in supply and the pace of downstream inventory replenishment, and is relatively more flexible in price and performance. Most coal companies still maintain strong dividend intentions. Against the backdrop of increased fluctuations in the macro environment and capital market, high-dividend assets still have allocation value. As coal prices recover and coal companies' profit expectations improve, the coal sector is expected to gradually shift from a single dividend logic to being driven by both cycles and dividends.
The main views of Open Source Securities are as follows:
Supply contraction was compounded by inverted shipments, and the price of thermal coal exceeded 950 yuan/ton
The core drivers of this round of thermal coal rise are production cuts in major production areas, pressure on shipping profits, and tightening port supplies. As of September 4, the Q5500 liquidation price in Qingang had risen to 962 yuan/ton. Currently, supply constraints have not been significantly eased, but after the end of the peak summer season, power plant daily consumption declined, inventory availability increased several times, demand-side support weakened marginal, and policy supervision and downstream procurement capacity will also limit the rise in coal prices.
Production cuts in production are compounded by inverted shipments, and port supply is being tightened
From January to July 2026, the country's raw coal production fell 3.2% year on year. Among them, in June and July, they fell 9.5% and 9.9% year on year, respectively. The contraction in production in the main production areas drove Kengkou coal prices to rise first. Since late May, the overall price spread between Kengkou-Port has narrowed, falling to 164 yuan/ton in July; after deducting railway freight, shortfall, and port miscellaneous charges, some resources experienced a reversal in shipping, and traders' enthusiasm for shipping declined. Since the July high, thermal coal stocks at Port 55 have dropped from about 78 million tons to about 68 million tons. The port's marketable supplies and high-quality resources with high calorific value are tight, driving the port's coal prices to make up for the rise.
Demand supports a marginal decline, and policy regulation limits the rise in coal prices
The daily consumption of power plants in the eight coastal provinces dropped from 2.466 million tons/day on August 5 to 2.102 million tons/day on September 3. The number of days inventory can be used rebounded from 14.3 days on August 22 to 16.7 days, and the pressure on terminal supply and demand eased somewhat. According to Development and Reform Price (2022) No. 303 and the National Development and Reform Commission Notice No. 4 of 2022, the regulatory threshold corresponding to the Q5500 spot price in Qingang is 1,155 yuan/ton. The current price is 193 yuan/ton lower than this threshold. Compared with 2021, there has been no simultaneous strengthening of strong demand, limited supply, and low power plant inventories in this round. It is expected that short-term coal prices will be dominated by high fluctuations, and subsequent increases may be narrower than in the previous period.
Risk warning: Domestic coal mines are resuming production faster than expected; downstream demand has declined more than expected; the volume of imported coal arriving in Hong Kong has increased markedly; and coal price control policies have been further tightened.