《Stock Market Everlasting Words》Expanding demand and low inventory levels are driving coal prices upward, benefiting the profitability outlook of mainland coal enterprises; policies have established coal's strategic role as a 'ballast stone,' accelerating the upgrading of coal production capacity structure; furthermore, intelligent transformation is enhancing operational performance. The convergence of these three core favorable factors comprehensively establishes sustainable growth momentum for the coal sector.
*Demand Expansion and Inventory Decline*
On the supply and demand side, continued economic recovery has driven rapid growth in electricity demand, directly increasing thermal coal consumption. According to data from the China Electricity Council and financial information provider Wind, as of September 2026, the average daily coal consumption of six major mainland power plants reached 938,000 tons, a year-on-year increase of 10.3%. Accompanying the expansion of electricity demand, the number of days covered by power plants' coal inventories continues to shrink. Data from the China Electricity Council and Shanghai Steel Exchange show that the number of days covered by coal inventories at the six major power plants gradually declined from 17.2 days at the beginning of July this year to 15.2 days in September, reaching a historical low. Given the resilience of mainland coal demand, the International Energy Agency (IEA) raised its forecast for mainland China's annual coal consumption in September 2026, increasing the estimate from the previously expected 4.956 billion tons to a record 5 billion tons. Under the dual effects of rising demand and tightening inventories, coal prices have risen strongly. Qinhuangdao thermal coal prices were reported at 988 yuan per ton (RMB, same below) in September this year, a year-on-year surge of 39.9%, with market expectations that prices could break the 1,000 yuan per ton mark within the year. With expanding demand and low inventory levels, the profitability outlook for coal companies will be favorable.
*Policy-Driven Capacity Upgrading*
Mainland strategic policies clearly empower high-quality development in the coal industry. The '15th Five-Year Plan for Building a New Energy System,' jointly issued by China's National Development and Reform Commission and the National Energy Administration, explicitly states that by 2030, mainland China's total primary energy production capacity must reach 5.8 billion tons of standard coal, an increase of 670 million tons from 5.13 billion tons in 2025, establishing coal's 'ballast stone' status in national energy security. The plan also requires that by 2030, the proportion of large modern coal mines in mainland China must reach 87%, and the proportion of intelligent coal mine capacity must increase to 75%. To accelerate technology implementation, local governments have simultaneously introduced incentive measures, such as Guizhou Province offering up to 30% subsidies for coal enterprises building intelligent computing centers or purchasing domestically produced artificial intelligence (AI) chip equipment for intelligent upgrades. Policy support and local subsidies work in tandem to open a sustainable development path for the mainland coal sector.
*Intelligent Transformation Reshapes Industry Operational Performance*
The rising penetration of intelligence has driven structural cost reductions in coal enterprises, enhancing sector profitability resilience and safety margins. The '2025 Annual Report on Coal Industry Development,' released by the China Coal Industry Association, shows that by the end of 2025, a cumulative total of 1,066 intelligent coal mines had been built in mainland China, with the proportion of intelligent coal mine capacity exceeding 65%. Intelligent coal mines will enhance the operational performance of coal enterprises. Research by management consulting firm McKinsey indicates that if AI technology is deeply applied in coal mines, the industry's average profit margin could increase by up to 12 percentage points, with return on invested capital (ROIC) increasing by 3 percentage points. Overall, technological dividends are being transformed into tangible financial gains, laying the foundation for sustainable profit growth in the coal sector.
Source: China Electricity Council, Wind, Shanghai Steel Exchange, International Energy Agency (IEA), China National Development and Reform Commission, National Energy Administration, '15th Five-Year Plan for Building a New Energy System,' China Coal Industry Association, '2025 Annual Report on Coal Industry Development,' McKinsey
《Industrial and Commercial Bank of China (Asia) Securities Department Analyst Yip Chi Hang》
*Articles published under a byline and/or without a byline in 'Economic Link' represent the personal opinions of the authors and do not reflect the position of 'Economic Link.' 'Economic Link' plays the role of providing a free speech platform.
*Demand Expansion and Inventory Decline*
On the supply and demand side, continued economic recovery has driven rapid growth in electricity demand, directly increasing thermal coal consumption. According to data from the China Electricity Council and financial information provider Wind, as of September 2026, the average daily coal consumption of six major mainland power plants reached 938,000 tons, a year-on-year increase of 10.3%. Accompanying the expansion of electricity demand, the number of days covered by power plants' coal inventories continues to shrink. Data from the China Electricity Council and Shanghai Steel Exchange show that the number of days covered by coal inventories at the six major power plants gradually declined from 17.2 days at the beginning of July this year to 15.2 days in September, reaching a historical low. Given the resilience of mainland coal demand, the International Energy Agency (IEA) raised its forecast for mainland China's annual coal consumption in September 2026, increasing the estimate from the previously expected 4.956 billion tons to a record 5 billion tons. Under the dual effects of rising demand and tightening inventories, coal prices have risen strongly. Qinhuangdao thermal coal prices were reported at 988 yuan per ton (RMB, same below) in September this year, a year-on-year surge of 39.9%, with market expectations that prices could break the 1,000 yuan per ton mark within the year. With expanding demand and low inventory levels, the profitability outlook for coal companies will be favorable.
*Policy-Driven Capacity Upgrading*
Mainland strategic policies clearly empower high-quality development in the coal industry. The '15th Five-Year Plan for Building a New Energy System,' jointly issued by China's National Development and Reform Commission and the National Energy Administration, explicitly states that by 2030, mainland China's total primary energy production capacity must reach 5.8 billion tons of standard coal, an increase of 670 million tons from 5.13 billion tons in 2025, establishing coal's 'ballast stone' status in national energy security. The plan also requires that by 2030, the proportion of large modern coal mines in mainland China must reach 87%, and the proportion of intelligent coal mine capacity must increase to 75%. To accelerate technology implementation, local governments have simultaneously introduced incentive measures, such as Guizhou Province offering up to 30% subsidies for coal enterprises building intelligent computing centers or purchasing domestically produced artificial intelligence (AI) chip equipment for intelligent upgrades. Policy support and local subsidies work in tandem to open a sustainable development path for the mainland coal sector.
*Intelligent Transformation Reshapes Industry Operational Performance*
The rising penetration of intelligence has driven structural cost reductions in coal enterprises, enhancing sector profitability resilience and safety margins. The '2025 Annual Report on Coal Industry Development,' released by the China Coal Industry Association, shows that by the end of 2025, a cumulative total of 1,066 intelligent coal mines had been built in mainland China, with the proportion of intelligent coal mine capacity exceeding 65%. Intelligent coal mines will enhance the operational performance of coal enterprises. Research by management consulting firm McKinsey indicates that if AI technology is deeply applied in coal mines, the industry's average profit margin could increase by up to 12 percentage points, with return on invested capital (ROIC) increasing by 3 percentage points. Overall, technological dividends are being transformed into tangible financial gains, laying the foundation for sustainable profit growth in the coal sector.
Source: China Electricity Council, Wind, Shanghai Steel Exchange, International Energy Agency (IEA), China National Development and Reform Commission, National Energy Administration, '15th Five-Year Plan for Building a New Energy System,' China Coal Industry Association, '2025 Annual Report on Coal Industry Development,' McKinsey
《Industrial and Commercial Bank of China (Asia) Securities Department Analyst Yip Chi Hang》
*Articles published under a byline and/or without a byline in 'Economic Link' represent the personal opinions of the authors and do not reflect the position of 'Economic Link.' 'Economic Link' plays the role of providing a free speech platform.
