Coal ends its decline since March 5th, with rising oil and gas prices driving coal prices to bottom out and rebound.

How does the surge in international oil and gas prices due to AI influence highlight the economic competitiveness of coal and drive demand?

According to Caixin, on March 20, the China Coal Market Network reported that the CCTD Bohai Rim thermal coal spot reference prices slightly increased by 2 yuan/ton for 4500K, while 5000K and 5500K remained flat, ending the downward trend since March 5. On that day, the port market saw significant changes, with prices for the three grades rising by 7, 6, and 6 yuan/ton respectively, closing at 570, 655, and 737 yuan/ton.

Recently, domestic coal prices have bottomed out and rebounded, driven by multiple factors including supply and demand patterns and international markets. From the domestic supply and demand perspective, in early March, coal mine capacity utilization in major producing regions recovered to the same period levels. Coupled with the seasonal decline in electricity demand, coal prices continued to fall. By late March, demand for low-calorie coal in industries such as cement and chemicals increased significantly, pushing up regional coal prices and raising trade costs.

Internationally, ongoing Middle East geopolitical conflicts have led to sharp increases in global oil and gas prices. Consequently, international coal prices have also risen, with import coal landing costs significantly increasing, reducing the impact of imported coal on the domestic market.

Under the influence of geopolitical risks, soaring global oil and gas prices have made coal as an alternative energy source more economically attractive. Power companies in Europe and Northeast Asia are shifting towards coal-fired power generation. Meanwhile, rising oil and gas prices have also driven up chemical product prices, boosting production willingness in coal chemical enterprises, increasing operating loads, and raising coal demand, further supporting domestic coal prices.

Looking ahead, during the 14th Five-Year Plan period, the coal industry will continue to promote intelligent and clean transformation. Intelligent technologies will penetrate the entire industry chain, improving production efficiency and safety; breakthroughs in clean utilization technologies will drive coal from being merely a fuel to becoming a raw material, accelerating industrialization of high-value-added products such as coal-based specialty fuels and advanced chemicals.

Specifically, in the A-share market, the sustained high level of oil prices will remain the core backdrop for some time. As a substitute energy source, demand for coal is expected to continue rising, and industry profitability may improve. Under the dual influence of geopolitical conflicts driving energy prices higher and industry transformation, the coal sector has conditions for valuation recovery. Investors may focus on leading companies with resource endowments, cost advantages, and supply chain extension capabilities. (Everbright Securities Micro News)