HK Stock Market Move | Coal stocks continued to rebound and rise, with the peak season approaching expected to drive the price of coking coal back into an upward trend. The defensive attributes of the sector remain prominent.

Coal stocks continued to rebound, with SOUTHGOBI (01878) up 12.12% at HK$2.59, CHINA QINFA (00866) up 4.35% at HK$1.2, China Coal Energy (01898) up 4.33% at HK$8.91, and KINETIC DEV (01277) up 3.68% at HK$1.41. Zhongtai released a research report stating that due to the impact of oversupply of old standard rebar and weakening demand in the off-season, more steel mills are undergoing maintenance in August, leading to a overall weakening of the coking coal industry. With the peak season of September approaching, steel mills are expected to resume production, and pig iron daily output is expected to stop falling and rise, driving coking coal prices back on an uptrend. At the same time, during the "Golden September and Silver October" period, demand for chemicals and building materials will enter the peak season, and the elasticity of high-calorific value thermal coal prices is expected to be highlighted. Changjiang pointed out that with the eighth round of coke price reductions and the rebound in steel prices, the losses of coking plants have intensified while the profits of steel mills have improved. This has led to an increase in coke prices, boosting market sentiment and short-term expectations for a bottoming out in the dual coking industry. The bank further noted that at the current point in time, the coal sector still has outstanding defensive attributes based on healthy balance sheets, predictable cash flows, and dividends.