Debon Securities: Off-peak season for electricity opens, coal prices continue to rebound.

Dong Securities released a research report stating that daily consumption remains at a high level. With the weakening of hydropower, the effect of thermal power replenishment is becoming evident, and with the depletion of terminal inventories, short-term coal prices are supported, and coal prices are expected to start a fluctuating rebound. The peak season of "Golden September and Silver October" is approaching. Although overall building materials consumption is lower than in previous years, month-on-month, building materials consumption in September and October is likely to show a marginal increase. With major measures such as "two reductions" and "two new" accelerating, physical work volume is expected to accelerate, and non-electric industry coal demand may be marginally restored. After the downward trend in coal industry supply growth in 2023, coal prices experienced two significant support tests of 800 yuan/ton in May 2023 and April 2024. With economic recovery combined with weak supply, the central coal price is expected to steadily increase year by year. Terminal daily consumption remains unchanged, and thermal coal prices continue to rise. A) Price and event review: This week, the price of Qinhuangdao Q5500 thermal coal continued to rise to 866 yuan/ton (up 1.05% month-on-month). In terms of production areas, a few previously closed coal mines resumed production, leading to a slight increase in supply. At the pithead, transportation demand remained stable, with some terminals releasing a small amount of restocking demand, leading to a continuation of rising pithead prices. In terms of ports, with a backlog of shipments, traders operated cautiously, railway transportation volume remained at a low level, and port inventories continued to decline. Downstream, daily consumption remains high, with the weakening of hydropower, the effect of thermal power replenishment becoming evident, and short-term coal prices supported by the depletion of terminal inventories. B) Short-term price view: Dong Securities believes that coal prices are likely to start a fluctuating rebound. i) Expectation of reduced hydropower: According to the National Climate Center, most of the southwestern region is expected to receive less precipitation in September, leading to a reduction in hydropower output, and a stronger effect of thermal power replenishment; ii) The peak season of "Golden September and Silver October" is approaching: Although overall building materials consumption is lower than in previous years, month-on-month, building materials consumption in September and October is likely to show a marginal increase. With major measures such as "two reductions" and "two new" accelerating, physical work volume is expected to accelerate, and non-electric industry coal demand may be marginally restored; iii) Non-electric demand is resilient: According to Mysteel data, the latest operating rates of methanol/urea were 88%/85%, which are at historically high levels. C) Medium and long-term price view: Dong Securities believes that thermal coal has strong support at 800 yuan/ton. i) In the first eight months of 2024, the total coal production in China was 30.52 billion tons, a year-on-year decrease of 0.3%, with an annualized production of only 45.78 billion tons, slightly lower than the 46.6 billion tons in 2023; ii) In 2024, the long-term coal supply and demand...Hou Panjiang Refined Coal(600395.SH), Shaanxi Energy Investment(001286.SZ), Jiangsu Xukuang Energy(600925.SH), etc. 3) Double coke elasticity. With the expectation of recovery, there is rebound space for double coke after experiencing a significant price drop in the early stage. Recommendations: Shanxi Luan Environmental Energy Dev.Co.,Ltd(601699.SH), Pingdingshan Tianan Coal Mining(601666.SH), Huaibei Mining Holdings(600985.SH), CHINA RISUN GP(01907). Suggestions to pay attention to: Shanxi Coking Coal Energy Group(000983.SZ), Jizhong Energy Resources(000937.SZ), etc. Risk warning: The progress of domestic economic recovery is slower than expected; overseas demand recovery is slower than expected; the decline in crude oil prices drags down the prices of coal chemical products.There is a problem with the computer.