Recently, a document concerning the capacity control of the coal industry has drawn market attention. On July 24th, the main contract of coking coal futures opened higher in the afternoon and hit the daily limit up at the end of the trading session. In the four trading days of this week, the main contract of coking coal futures has risen by approximately 30% cumulatively.
In contrast to the red-hot market conditions, many listed coal companies have recently disclosed their performance forecasts for the first half of the year, and the net profits of many enterprises have dropped significantly. Industry insiders said that in the first half of the year, the price of thermal coal continued to decline from the high level at the beginning of the year. The leading spot prices of coke and coking coal dropped by more than 20%. The fall in coal prices may directly lead to a contraction in corporate profits and result in losses.
In response, some coal enterprise executives stated that as domestic power load has repeatedly hit new highs, the price increase of coal in some production areas has continued to expand. Coupled with the accelerated contraction of coal imports and the gradual implementation of the "anti-internal competition" policy, after a long period of low prices, the market situation may bottom out and rebound in the second half of the year.
The decline in coal prices has led to a forecast drop in the performance of coal enterprises
Data shows that so far, 22 coal enterprises have disclosed their performance forecasts for the first half of 2025. Journalists have sorted out and found that over 80% of the 22 enterprises have seen their performance decline year-on-year. Among them, 5 companies suffered losses for the first time, 8 companies suffered consecutive losses, and 6 companies are expected to see a decline in profits. Only a few enterprises reported good news amid concerns. For instance, Meijin Energy (000723), Antai Group (600408), and Yunmei Energy (600792) are expected to narrow their year-on-year losses, while Jinneng Technology (603113) and Baotailong (601011) are likely to turn losses into profits.
Regarding the reasons for the expected decline in the semi-annual report performance, most coal enterprises directly stated in their announcements that it was affected by the downward trend in coal prices.
Specifically, China Shenhua (601088), as the industry leader, is expected to achieve a net profit of 23.6 billion to 25.6 billion yuan in the first half of the year. Although this achievement far exceeded that of other enterprises in the same industry, compared with the same period of the previous year (statutory disclosed data), it decreased by 3.9 billion yuan to 5.9 billion yuan, a decline of 13.2% to 20.0%. When asked about the main reasons for the year-on-year decline in net profit, China Shenhua stated that it was due to the decrease in coal sales volume and average selling price, which led to a decline in the profit of the group's coal sector.
Facing the continuously declining market situation, Shanxi Coking (600740) stated in its performance forecast that although its main business has improved significantly year-on-year due to the continuous decline in prices in the upstream and downstream markets, it has not yet completely shaken off losses. The company is taking multiple measures, with lean cost control and scientific marketing management as the main lines, optimizing mechanisms and processes, deepening reform and transformation, overcoming adverse market factors, enhancing the resilience of the company's production and operation, and promoting the stable and sustainable development of the company.
Data shows that the leading spot prices of coke and coking coal dropped by more than 20% in the first half of 2025, hitting an eight-year low. The price of thermal coal has also hit a five-year low. The continuous decline in coal prices has become the main pressure faced by many coal enterprises.
On the one hand, the domestic demand for coal in the first half of the year remains to be released. On the other hand, in the first half of the year, due to the inertia of "ensuring supply" and the loose supply and demand of overseas coal, the total domestic coal supply still maintained a relatively high growth rate. Hu Bo, a researcher at Shanxi Securities Research Institute, said that although supply has marginally declined since the second quarter, it still outperformed demand.
Hu Bo believes that although some enterprises have alleviated certain pressure through long-term contract sales and cost control, they are still actively seeking a balance point due to the impact of changes in the economic climate.
The accumulation of demand has driven the market to recover
Unlike the "cooling" of the semi-annual reports of listed coal companies, since July, with the national power load repeatedly hitting new highs and the continuous contraction of coal imports, the price increase of coal in some production areas is gradually expanding, and the coal market price has shown a significant recovery.
The latest data from the National Bureau of Statistics shows that in the first ten days of July, the prices of all types of coal across the country remained stable with a slight increase: anthracite was 829.8 yuan per ton, up 0.9%. Ordinary mixed coal is priced at 488.3 yuan per ton, with an increase of 1.7%. Shanxi mixed steel is priced at 553.3 yuan per ton, with an increase of 1.5%. Shanxi Youhun is priced at 622.6 yuan per ton, with an increase of 0.6%. The price of Datong mixed coal is 656.6 yuan per ton, with an increase of 0.6%.
Similar to the spot market, coking coal futures have also maintained a continuous upward trend. The main contract of coking coal futures not only maintained an upward trend for two consecutive months, setting new highs since March 2025, but also saw a significant rise on July 22nd and 23rd, reaching a peak of 1,135.5 yuan per ton, with an increase of 16.94%. On July 24th, the main contract of coking coal futures opened higher in the afternoon and hit the daily limit up at the end of the trading session. In the four trading days of this week, the main contract of coking coal futures has risen by approximately 30% cumulatively.
It is worth noting that at the beginning of this round of price increase, China's cumulative coal imports in the first half of the year reached 221.7 million tons, a year-on-year decrease of 11.1%. In June alone, 33.037 million tons were achieved, a year-on-year decrease of 25.93%.
Guotai Haitong Securities' recent research report suggests that since May, as the demand for thermal power has resumed positive growth, the national temperature has risen significantly from June to July. Coupled with the fact that domestic coal production and imports have started to contract since April, the bottom of the coal cycle may have emerged. In the medium and long term, as the implementation of the new energy policy leads to the peak of new installed capacity, the impact pressure on thermal power will also peak in 2025. The supply and demand pattern of coal is expected to gradually improve in the future.
Journalists' visits to the production frontlines of multiple coal mines in Shanxi Province revealed that production activities were carried out in an orderly manner. Many coal industry insiders said that despite the continuous decline in coal prices in the first half of the year, the output of raw coal by large-scale enterprises in China increased by 5.4% year-on-year, and the dominant position of coal in the energy industry structure has not changed. At present, although the upward sentiment has not yet spread to the production frontline, enterprises still maintain confidence in the future development of the industry.
The sixth meeting of the Central Committee for Financial and Economic Affairs held on July 1st emphasized that to further advance the construction of a unified national market, it is necessary to focus on key and difficult points, govern enterprises' low-price and disorderly competition in accordance with laws and regulations, guide enterprises to improve product quality, and promote the orderly exit of backward production capacity. Meanwhile, the China Coal Transport and Distribution Association has also emphasized recently that it is necessary to strengthen industry self-discipline, rectify "involution" competition, and promote a balance between supply and demand in the coal market.
From the current perspective, in terms of thermal coal, in the absence of more favorable factors in supply and demand, the price of thermal coal for power generation may fluctuate seasonally. In terms of coking coal, if the output of molten iron remains at a high level, the prices of upstream varieties will have stronger support. Hu Bo also said that with the change in policy direction brought about by the "anti-internal competition", it might lead to a coal price increase that exceeds expectations.