Guosheng Securities released a research report highlighting that U.S. coal consumption is projected to reach 439 million tons in 2025, a 6.7% year-on-year increase, according to EIA forecasts. Additionally, coal stockpiles at U.S. power plants are expected to decline further, dropping to 107 million short tons by the end of 2025. The combination of low inventories, surging demand, and persistently constrained supply due to declining production could drive a historic reversal in the U.S. coal market and prices.

With explosive growth in domestic coal consumption, U.S. coal exports are likely to slow, potentially pushing the global seaborne thermal coal trade into a tight balance. Investors are advised to focus on domestic coal companies with regional and cost advantages.

**Key Insights from Guosheng Securities:**

**U.S. Coal Supply:** Long-term underinvestment has left the coal industry with limited new capacity under development, creating structural supply constraints. According to the IEA’s *Global Energy Investment 2025* report, nearly all global coal investment growth in 2024 will come from China and India, with additional contributions from South Africa and Southeast Asia. Investment is skewed toward coking coal, while thermal coal’s share in new projects is expected to shrink.

New coal mine development faces multiple hurdles, including economic weakness, low prices, climate policy pressures, and financing challenges. Future investments will likely focus on existing assets. The IEA estimates that the U.S. has only 5.9 million tons per year of new coal capacity (both coking and thermal) under construction, with thermal coal accounting for just 1.05 million tons annually.

**U.S. Coal Demand:** Electricity generation remains the core driver, accounting for over 90% of coal demand. EIA projections indicate a significant rise in U.S. coal-fired power demand in 2025.

**Computing Boom Fuels Power Surge, Reinforcing Coal’s Role** BP’s *Energy Outlook 2025* suggests that under the "current trajectory," U.S. data centers will account for about 40% of the country’s electricity demand growth from 2023 to 2035. Goldman Sachs forecasts a 15% compound annual growth rate (CAGR) in U.S. data center power demand from 2023 to 2030, with their share of total electricity consumption rising from ~3% in 2024 to ~8% by 2030. Meeting this demand could require ~47 GW of new power generation capacity by 2030.

BP notes that short-term cyclical fluctuations in energy demand are primarily managed through adjustments in fossil fuel consumption rather than renewables. Fossil fuels’ adaptability stems from: 1) Renewables’ high upfront capital costs and low operating costs, making them less responsive to demand swings; 2) Oil-based fuels’ flexibility in production and inventory adjustments; 3) Most renewable projects being tied to long-term regulatory frameworks or power purchase agreements.

Consequently, during periods of slow efficiency gains, fossil fuels—particularly coal—will likely bear the brunt of incremental energy demand.

**U.S. Coal Industry Revival** Peabody Energy reports that rising power demand and policy tailwinds are creating favorable conditions for coal. In H1 2025, U.S. coal-fired power generation rose 15% year-on-year. Despite current coal plant utilization rates at just 42% (vs. 72% in 2008), operating at historical capacity factors could boost total U.S. generation by 10% without new plants, potentially adding 250 million tons of annual coal demand—a 56.9% increase from 2025’s projected baseline.

**Stock Picks:** - **U.S. Coal Producers:** Peabody Energy (BTU.US), Core Natural (CNR.US). - **Domestic Coal Plays:** Yancoal Australia (03668), Yankuang Energy (01171). - **Other Beneficiaries:** China Coal (01898), Shaanxi Coal (601225.SH), Jinneng Holding (601001.SH), Shanxi Coal (600546.SH), Lu’an Environmental Energy (601699.SH). - **Smart Mining Focus:** Keda Automation (920932.BJ). - **Turnaround Candidates:** China Qinfa (00866). - **Additional Watchlist:** Lianli Development (01277), SDIC Power (002128.SZ), Huaibei Mining (600985.SH), Haohua Energy (601101.SH), Pingmei Group (601666.SH), Huayang Energy (600348.SH), Gansu Energy (000552.SZ). - **Special Mention:** Jiangxi Tungsten (600397.SH), following recent ownership restructuring.

**Risks:** Policy sustainability, competition from natural gas/renewables, and global economic slowdown.