The coking coal sector experienced inventory drawdown during the National Day holiday period. On the supply side, some mines underwent maintenance during the holiday, and Mongolia coal clearance saw the three major border crossings closed for 7 days during the National Day period, leading to rapid inventory depletion at border crossings. Post-holiday clearance is expected to accelerate, while seaborne coal arrivals declined from high levels, with holiday period supply decreasing on a sequential basis.
Zheshang Securities released a research report stating that Mongolia coal import volumes bottomed out and recovered in Q3, with supply chain trade profits also achieving a bottom rebound alongside price recovery. Under the domestic "anti-involution" environment, pig iron production remains at high levels. If the coal industry continues to advance "excess production inspections," it is expected to maintain a tight balance in the coking coal supply-demand pattern, providing support for coking coal prices, and Mongolia coal trading companies' profit margins are expected to recover.
CITIC Securities research report noted that among the sample coal listed companies tracked, Q3 2025 net profit increased by approximately 18% on average sequentially, with a year-over-year decline of about 27% for the first three quarters. On a sequential basis, coking coal and anthracite companies show greater performance expectation elasticity, but the thermal coal sector still contributes the most profit.
Looking ahead to Q4, the industry overall supply-demand balance may see periodic supply gaps during peak season. If anti-involution policy enforcement intensifies, coal prices could exceed expectations. Currently, the sector's policy expectations, coal prices, and performance outlook are all improving. Going forward, with market style rotation or policy catalysts, the sector may see sustained excess returns.
Related Hong Kong-listed coal stocks include: China Shenhua (01088), China Coal Energy (01898), Yankuang Energy (01171), E-COMMODITIES (01733), Yancoal Australia (03668), CHINA QINFA (00866), among others.