The coal sector saw a pullback today, and the Coal ETF Guotai (515220) fell by more than 2%. The outbreak of the Iran-U.S. conflict presents an opportunity to capitalize on the energy substitution allocation.

On April 3rd, the coal sector retreated, with the Guotai Coal ETF (515220) falling over 2%. The outbreak of the Iran-U.S. conflict presents an opportunity to explore energy substitution strategies.

Guosheng Securities pointed out that since March, the Iran-U.S. conflict has erupted, causing a sharp rise in international energy prices. The inverted prices of imported coal have intensified, and it is expected that China’s coal imports will further decrease, providing strong support for the domestic off-season coal market. Power plants’ inventory accumulation has fallen short of expectations and remains in the process of destocking, and the spring maintenance on the Daqin Line in April will affect the northern port’s coal inflow, laying the foundation for a subdued price season and opening up room for higher seasonal coal prices. As geopolitical conflicts continue to lead to reduced import volumes, combined with a surge in coal chemical demand, the reality of a non-dull off-season for coal prices is emerging. Moreover, the longer the conflict persists, the stronger the upward momentum for coal prices. Coking coal prices have already risen against seasonal trends, and thermal coal prices are also experiencing a catch-up rally. Analysts still believe that coal prices will challenge the 1,000 yuan mark. Regarding overseas markets, shortages of diesel supply in some countries may force mines into passive production cuts or even shutdowns, potentially further tightening global coal supply and exacerbating supply-demand tensions.

The Guotai Coal ETF (515220) tracks the China Securities Coal Index (399998), which selects listed companies involved in coal mining, processing, and related businesses from the Shanghai and Shenzhen markets as index samples. The index covers sub-sectors such as thermal coal and coking coal, aiming to reflect the overall performance of listed companies in the coal industry. The index features high dividend yields and strong cyclical characteristics.

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