Guosheng Securities: The recent decline in coal prices may be coming to an end, pay attention to opportunities on the left side of the layout.

Guosheng Securities released a research report last week stating that although coal prices are still in the process of accelerating to the bottom, it is worth noting that the leading coal companies have stopped falling and rebounded. When prices fall but stock prices rise, it is often an important signal for positioning on the left side, indicating that the market has a sufficient understanding of the decline in coal prices, which is a bearish signal. The report emphasized two main tasks for the coal market this year: (1) actively reducing inventory; (2) finding the bottom price. Currently, the report believes that the current round of coal price decline may be nearing its end, predicting that the speed of decline will significantly slow down or even stop by the second half of next week, highlighting the opportunity for left-side positioning. Key points from Guosheng Securities include: Australia's thermal coal exports review for 2024 In 2024, Australia's exports of thermal coal to China Shipbuilding Industry Group Power increased by 45% to 74 million tons, with the majority being 5500 kcal high ash thermal coal; Exports to Japan increased by 5% to 75 million tons in 2024. The increase in exports is mainly due to the summer heat in Japan driving up electricity demand and the rise in liquefied natural gas prices towards the end of the year making coal-fired power generation more economical compared to gas-fired power generation. Looking ahead, further restarts of nuclear power will suppress Japan's demand for Australian thermal coal in the coming years. Australia's coking coal exports review for 2024 India remains the largest export market for Australia's metallurgical coal. In 2024, Australia exported 38 million tons of metallurgical coal to India, a decrease of 10% year-on-year, accounting for 25% of total exports. With blast furnace-steel converter capacities and steel production expanding continuously, India's demand for seaborne metallurgical coal is expected to continue growing. Increased production helps partially reverse the previous trend of rising production costs Due to rising prices of key mining inputs such as labor, explosives, diesel, and spare parts, Australia's coal production costs have risen significantly in recent years. Looking ahead, increasing production has a deflationary effect on costs, especially as most of the increased production consists of high ash coal, which does not need to be processed through coal wash plants. Overall, although the production costs of some Australian coal enterprises have fallen from their peak, the increase in mining royalties and other costs may lead to a decrease in competitiveness, and a further decrease in seaborne coal demand in the future may further affect the survival of coal enterprises. Risk warning: Accelerated production of new mines. Sharp decline in coal prices. Coal demand lower than expected.