HK Stock Market Move | Coal stocks rise against the market trend as the supply and demand situation remains tight, with both thermal and coking coal prices accelerating upward simultaneously.

Coal stocks rose against the market trend. As of the time of writing, SHOUANG RES (00639) was up 4.26%, priced at HKD 3.06; KINETIC DEV (01277) was up 2.58%, priced at HKD 2.19; Yankuang Energy Group (01171) was up 2.34%, priced at HKD 14.01; and YANCOAL AUS (03668) was up 1.52%, priced at HKD 34.74. In terms of news, since August, the prices of thermal coal and coking coal have surged simultaneously. Guosheng pointed out that this week, coal prices have rebounded significantly out of season, primarily due to the already tight supply situation being exacerbated by strong rainfall in major production areas, which has led to a further contraction in output. Additionally, the volume of railway shipments has dropped significantly due to heavy rain, resulting in a rapid decrease in inventories at northern ports. Coupled with the impact of production cuts, the contracted volume of power coal may be passively adjusted downwards, leading to an increase in market-based purchases, which further intensifies the tight supply situation for spot coal and causes prices to strengthen again. Guosen noted that in the short term, supply recovery in production areas is slow before the National Day holiday, and the clearance of coal from Mongolia is unlikely to recover quickly from a low level. With the peak season of September and October approaching and winter stockpiling on the horizon, the fundamentals of coal remain relatively strong, with potential for a pullback. In the medium term, there is a gradual possibility of restoration in the clearance of Mongolian coal, but after the downstream phase of replenishment, weak end-user demand is expected to reemerge, leading to downward pressure on prices.