The seventh round of price increases has arrived! Multiple markets in Shandong region plan to raise coke prices, including Weifang, Binzhou, Dezhou, Jining, Zaozhuang, Heze, Rizhao, Tai'an, Linyi and other markets. Tamped wet-quenched coke prices will increase by 50 yuan/ton, tamped dry-quenched coke by 55 yuan/ton, and top-charged coke by 75 yuan/ton, effective from 0:00 on August 19. This price increase is led by local Shandong coking enterprises in response to market supply and demand changes.
Securities analysts note that July coal market pricing was "above expectations," with annual lows potentially already appearing. Anti-involution policies have created elastic space that boosts inflation levels, with thermal coal rising relatively moderately while coking coal showing stronger momentum. Coal price annual lows are expected to have emerged, with prices unlikely to retest lows in the second half of the year. As anti-involution continues to ferment, coal stocks may trend slightly upward or sideways, with thermal coal accelerating upward elasticity recovery.
Specifically, from the supply perspective, raw coal supply showed marginal decline in January-July. From January to July 2025, cumulative raw coal production reached 2.779 billion tons, up 3.8% year-on-year, with growth rate marginally declining. July production reached 381 million tons, down 3.8% year-on-year and 9.52% month-on-month.
From the demand perspective, terminal demand in January-July was supported by manufacturing and infrastructure, with power demand improving. Fixed asset investment in January-July 2025 grew 1.6% year-on-year, with manufacturing investment up 6.2%, infrastructure investment up 3.2%, and real estate investment down 12.0%. January-July thermal power cumulative growth was -1.3%; coke cumulative growth was 2.8%; pig iron cumulative growth was -1.3%; cement cumulative growth was -4.5%. July thermal power growth was 4.3%; coke growth was 0.5%; pig iron growth was -1.4%; cement growth was -5.6%.
Imports: July coal imports increased month-on-month, while January-July import volumes maintained contraction trend. January-July 2025 cumulative imports reached 25.7 million tons, down 13.0% year-on-year. July imports reached 35.61 million tons, down 22.94% year-on-year but up 7.79% month-on-month.
The July market had expectations for price increases, but market pricing was "above expectations." The surprise came from elastic space brought by policy shifts after "anti-involution," with the ultimate goal of boosting inflation levels. July fundamentals were relatively supportive, with thermal coal rising relatively moderately and coking coal showing stronger performance. Fundamental trends haven't exceeded market expectations, but the market began raising summer price expectations in late July, leading to significant coal stock price increases.
August markets are paying more attention to policy implementation and supply-demand conditions after expectation adjustments. Currently, both industrial and financial markets show increased sensitivity to positive factors, warranting attention to accelerating price increases. Coal price annual lows are expected to have emerged, with prices unlikely to retest lows in the second half.
The "mild storm" brought by anti-involution policies. At the coal level, anti-involution doesn't equal supply-side reform, with expected intensity being more moderate than supply-side reform. On one hand, coal hasn't entered the ten major production-limited industries; on the other hand, the industry hasn't triggered debt risks currently. Future measures beyond limiting overproduction and safety supervision upgrades may include nuclear capacity reductions for previously approved capacity expansions upon expiration, creating expectations for both capacity and production contraction.
While this round of anti-involution hasn't specifically mentioned coal, the industrial side shows certain "follow-the-trend" behavior, warranting attention to whether this tendency may trigger a "mild storm."
From the secondary market perspective, coal sector performance was strong last week, with markets initially interpreting this as a return of "re-inflation logic." However, when combined with policy background and pricing characteristics, the core driving force behind coal stock increases isn't systematic commodity price elevation, but repricing of high-dividend assets. This logic strengthening is also closely related to social security contribution policy implementation and state-owned real estate revitalization, with "bottom-line thinking" becoming a potential uncertainty variable.
Coal stock trend increases aren't a return of "re-inflation trading." Re-inflation trading requires policy-driven PPI recovery, triggering commodity price increases through supply-side contraction or demand stimulus, thereby driving cyclical sector valuation and earnings recovery. High-dividend trading is based on stable or even moderately declining commodity price environments, where markets value enterprise cash flow and dividend yield contributions to investment returns more. From policy guidance perspective, this round of coal stock increases aligns more with the latter logic.
Recent government policy focus is on "anti-involution" and "expanding domestic demand," emphasizing optimal resource allocation through "unified national market" construction. This fundamentally differs from market expectations of "2016-style policies that boost PPI through forced capacity reduction." Therefore, this round of coal stocks isn't based on cyclical recovery logic, but benefits from factors including slowing commodity price decline slopes, stable cash flows, and improved investment cost-effectiveness of dividend returns.
Coal sector dividend attractiveness has significantly improved, with funds "trading interest for risk." Against the backdrop of low risk-free rates and stable bond markets, coal stocks' current dividend advantages are extremely prominent: 2024 industry average dividend yield exceeded 5%, with some leading enterprises reaching over 10%, far exceeding government bond yields and most dividend assets. This naturally gives coal stocks "dividend substitute" attributes.
In fact, similar signals appeared in overall market style over the past week: banking stocks strengthened, small-cap rebounds, Hong Kong low-volatility dividend increases all reflected fund preferences returning to defensive logic of "visible cash flows, dividends covering risks."
Securities analysts indicate that last week's coal sector increases weren't a return of "re-inflation trading," but results of high-dividend asset repricing. Against the backdrop of low risk-free rates and policies strengthening cash flow visibility, coal stocks' 5%-10% high dividend yields significantly enhanced investment attractiveness. Social security contribution and state asset revitalization policies further strengthened this logic: the former stabilizes cost-side and suppresses significant PPI volatility, the latter improves fiscal environment and enhances high-dividend asset allocation value. Current markets value dividend returns more than cyclical elasticity, with defensive allocation under "bottom-line thinking" becoming fund preference.
Related concept stocks:
CHINA SHENHUA (01088): The company has abundant coal mine resource reserves with concentrated distribution, with resource reserves and recoverable reserves both ranking among the top domestically. As of 2024, the company's total coal resource reserves were 34.4 billion tons, with recoverable reserves of 15.1 billion tons. In 2024, the company's coal production was 327 million tons, with self-produced coal sales of 330 million tons, ranking first in the industry, and coal mineable years reaching 41 years. Meanwhile, the company has completed acquisition of Hangjin Energy, with Dayan Mining acquisition project progressing, while actively promoting new mine exploration and extraction, expecting further capacity expansion in the future. Additionally, the company's long-term contract (monthly + annual) ratio exceeds 87%, effectively smoothing coal price volatility, reducing operational risks, with highly resilient earnings growth.
CHINA COAL (01898): The company has abundant coal resources, ranking third among listed coal enterprises in coal resource reserves, second in recoverable coal reserves, with 94.8% of recoverable reserves concentrated in core Shanxi-Shaanxi-Mongolia coal production areas. Meanwhile, the company has industry-leading market share, with producing mine approved capacity reaching 165 million tons, producing equity capacity reaching 144 million tons. From 2018-2024, the company's coal production and sales grew continuously from less than 80 million tons to nearly 140 million tons, with Libi Mine and Weizigou Mine totaling 6.4 million tons capacity currently under construction, expected to trial run by end of 2025, with capacity still having incremental growth.
Yanzhou Coal Mining: In 2025, the company plans to produce 155-160 million tons of commercial coal and 8.6-9 million tons of chemical products; reduce coal sales costs by 3% year-on-year; reduce asset-liability ratio to below 60% year-on-year. Capital expenditure plan is 19.545 billion yuan. The company's Wanfu Coal Mine began joint trial operation at end of 2024, Wucaibei No. 4 Coal Mine is planned for production in 2025, Liusangedan and Galutu coal mines have received geological report approval, Huolinhe No. 1 Coal Mine has completed preliminary design, with these projects expected to bring nearly 50 million tons of capacity increment to the company.