Zhongjin: The coal industry does not have excess capacity, and the overall risk of excess capacity growth is relatively low.

The research report from Zhongjin Company believes that there is no overcapacity in the coal industry. We believe that the capacity of the coal industry is not excessive. During the unexpected downward trend in coal prices this year, the root cause lies in overcapacity production. Continuous high-intensity production exceeding approved capacity poses challenges in terms of safety and environmental protection. We believe that if supply and demand become excessively loose, there may still be some room for policy tightening in a reasonable and legal manner. At the same time, due to limited new capacity and the gradual phasing out of old and depleted capacity, we believe that the overall risk of excess capacity growth is relatively low.