CITIC Securities: Continue to be optimistic about coal prices in the second quarter

The National Bureau of Statistics data shows that in the first two months of 2026, in the coal mining and washing industry, large-scale enterprises recorded total profits of 53.13 billion yuan, up 4.88% year over year. Top thermal coal company [name omitted in source] saw steady performance gains because its share of annual long-term contract volumes is relatively high and its annual long-term contract prices declined by a smaller percentage year over year; the metallurgical coal company saw the most noticeable improvement in performance under the low-base effect due to a significant year-over-year increase in coal prices.

CITIC Securities said that conflict-related expectations in the Middle East have been repeatedly fluctuating, increasing volatility in domestic and international energy prices, but the overall trend is upward. If such conflict in that region continues, coal prices are expected to rise beyond expectations; even if the conflict eases, it will still take time for passage through the Strait of Hormuz and for energy production in the Middle East to recover to pre-conflict levels, so the current situation is broadly favorable for the market, improving expectations for domestic coal prices in the second quarter. After the sector’s adjustment, if coal price expectations get new catalysts, the rally could continue moving higher. Meanwhile, based on coal prices and corresponding chemical product price expectations, the price-increase effect since the onset of the conflict can be reflected even more fully in the second quarter, which is favorable for the sector and supports the launch of the sector’s second-quarter peak-season trading.