Shanxi: Anti-inner coil policy supports coal prices, coal supply may be constrained

Shanxi released a research report stating that in December 2025, China's raw coal production reached 4.37 billion tons, a year-on-year decrease of 1% and a month-on-month increase of 2.40%. In December, there was a significant adjustment in coal prices overall, mainly due to strong supply and weak demand. The rapid increase in imported coal had a clear suppressive effect on related varieties. On the demand side, factors such as weather, new energy, and real estate provided insufficient support for coal demand. In December, prices quickly fell to the range seen in early September. Despite market concerns over the rapid decline in coal prices in December, the trend of anti-"involution" has not changed, and there are still expectations for improvement in the performance of coal enterprises in Q4 2025, if prices continue to remain high in the long term, there is still room for recovery in performance in 2026. Key points from Shanxi: Supply: Slight increase in raw coal supply by 2025 By 2025, cumulative raw coal production reached 4.832 billion tons, a year-on-year increase of 1.2%, with a marginal decrease in the year-on-year growth rate compared to the previous month. In December, production reached 4.37 billion tons, a year-on-year decrease of 1% and a month-on-month increase of 2.40%. Demand: Termination demand in 2025 shows a downward trend, downstream demand needs improvement In 2025, fixed asset investment decreased by 3.8% year-on-year, with manufacturing investment increasing by 0.6%, infrastructure investment decreasing by 2.2%, and real estate investment decreasing by 17.2%. By 2025, the cumulative growth rate of thermal power generation achieved -1%; coking coal achieved 2.9%; pig iron achieved -3%; cement achieved -6.9%; in December, thermal power generation achieved -3.2%; coking coal achieved 1.9%; pig iron achieved -9.9%; cement achieved -6.6%. Imports: Significant increase in coal imports in December, and a reduction in imports by 2025 By 2025, cumulative imports reached 490 million tons, a year-on-year decrease of 9.6%. In December, imports reached 58.60 million tons, a year-on-year increase of 11.95% and a month-on-month increase of 33.02%. Prices: Coal prices in December fell month-on-month In December 2025, the average prices of Shanxi blend 5500 power coal, Jingtan Port primary coking coal, and Tianjin Port secondary metallurgical coke all saw different degrees of adjustments compared to the previous month. The month-on-month price decreases in various types of coal were power coal > coking coal > coke. Strong supply and weak demand led to price adjustments in December In December, there was a significant adjustment in coal prices overall, mainly due to strong supply and weak demand. The rapid increase in imported coal had a clear suppressive effect on related varieties. On the demand side, factors such as weather, new energy, and real estate provided insufficient support for coal demand. In December, prices quickly fell to the range seen in early September. The trend of anti-"involution" has not changed, and policies are expected to provide support Despite concerns in the market over the rapid decline in coal prices in December, considering that combating "involution" remains an important topic in economic work for 2026, the policy direction has not changed. By the end of 2025, relevant policies against "involution" were implemented as planned, so prices in January showed a trend of stabilization and recovery. It is maintained that if prices fall to a low level, it is worth waiting for policies to stabilize expectations. Stocks to watch It is recommended to pay attention to power coal stocks like Yankuang Energy Group (600188.SH), Shaanxi Coal Industry (601225.SH), China Shenhua Energy (601088.SH), China Coal Energy (601898.SH), Shanxi Coal International Energy Group (600546.SH), Jinneng Holding Shanxi Coal Industry (601001.SH); For coking coal, investors can focus on Shanxi Coking Coal Energy Group (000983.SZ), Huaibei Mining Holdings (600985.SH), Shanxi Lu'an Environmental Energy Development Co., Ltd. (601699.SH). Risk reminders Unexpected contraction in supply, slower-than-expected rise in demand, and a significant increase in coal imports.