CICC: Coal prices are expected to be low and high in 2026, and the price center for the whole year will remain the same year on year

The Zhitong Finance App learned that CICC released a research report saying that the bank expects coal prices to show a trend of low and high prices in 2026, and the annual center may be basically the same as 2025. The demand side may be the main drag factor, but supply-side constraints are relatively strong. Due to delayed policy transmission and seasonal effects in the first half of the year, demand may be lackluster, and coal prices may be under some pressure; demand is expected to improve marginally in the second half of the year, driving up coal prices.

CICC's main views are as follows:

There is not enough coal production capacity. The bank believes that there is no excess production capacity in the coal industry. The root cause of this year's decline in coal prices exceeding expectations is excessive production capacity. Continued high-intensity production that exceeds approved production capacity poses challenges to safety and environmental protection. The bank determined that if supply and demand are excessively relaxed, the policy may still have some room to increase and tighten supply in a reasonable and legal name. At the same time, due to limited new production capacity and the gradual withdrawal of old and exhausted production capacity, the bank believes that the risk of excessive growth in overall production capacity is low.

Demand for thermal coal remains at its peak. The bank anticipates that green energy may begin to squeeze the existing demand for coal power during the “15th Five-Year Plan” period, but total electricity demand is likely to maintain steady growth during this period (2024-2030 the compound annual growth rate of electricity consumption of the whole society may remain above 4.5%), so demand for coal power is expected to remain at a peak platform, and the risk of a sharp decline is limited.

Mongolian coal increased, and the supply and demand for coking coal was relaxed. The bank believes that the upward flexibility of domestic coking coal supply is limited in 2026, but Mongolian coal imports are increasing, and the overall supply of coking coal is likely to increase. On the demand side, there is a policy game to cut steel production, and there is uncertainty about the actual completion of production cuts. Overall, the bank judged that the supply and demand for coking coal was relatively relaxed in 2026, and Mongolian coal emissions limited upward price elasticity. However, as a core increase in imports, it is difficult for Mongolian coal to replace high-quality domestic coking coal, and the relatively tight supply of main coking coal continues.

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