CITIC Construction Investment: Coal prices rose year-on-year in the second quarter, and monthly electricity prices rebounded in some regions

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that in terms of thermal power, in the second quarter of 2026, thermal coal market prices rose year on year. Regions such as Guangdong and Jiangsu were affected by factors such as tight electricity supply and demand and rising primary energy prices. Monthly electricity prices rebounded, partly hedging the rise in fuel costs. At the same time, considering that Changxie electricity accounts for a relatively high annual share, the bank expects thermal power's 26Q2 to Q3 performance to be under pressure despite monthly electricity price recovery. On the green power side, the results and valuation for the first half of 2026 were under pressure due to strong pressure on the consumption of new energy sources combined with Document No. 136 promoting the full entry of new energy into the market. In terms of electricity supply and demand, affected by the pace of approval and commissioning of thermal power plants, the growth rate of new thermal power installations across the country is expected to slow down in 2027. Combined with a rebound in energy prices, the 27-year-old power supply price is expected to rise steadily. Overall, the power sector's performance pressure in the second quarter was strong, and the thermal power business situation in regions with high electricity consumption growth rates, such as Jiangsu and Zhejiang, is expected to gradually improve.

CITIC Construction Investment's main views are as follows:

Market review

From August 1 to August 6, the electricity sector (882528.WI) fell 1.85%, the Shanghai and Shenzhen 300 Index rose 2.32%, and the power sector outperformed the market by 4.17 percentage points. Since the beginning of 2026, the electricity sector has risen 5.61 percent, and the Shanghai and Shenzhen 300 Index has risen 1.39% over the same period. The electricity sector has outperformed the market by 4.22 percentage points since the beginning of the year. Looking at the molecular sector, the thermal power, hydropower, and gas sectors (CITIC Index) changed by 0.51%, -4.22%, and 2.56%, respectively, from August 1 to August 6.

The spot price of thermal coal increased by 3.03% month-on-month and 23.19% year-on-year

On August 9, the spot price of 5,500 kcal thermal coal in Qinhuangdao was 850 yuan/ton, up 3.03% month-on-month and 23.19% year-on-year. In terms of imported coal, the price of 5,500 kilocalories of Indonesian coal at Guangzhou Port on August 8 was 924 yuan/ton, up 2.45% month-on-month and 30.65% year-on-year.

Coal stocks in Qingang decreased by 3.52% month-on-month and increased by 13.72% year-on-year

In terms of coal stocks, as of August 7, Qingang stocks 6.3 million tons, a decrease of 230,000 tons from the previous month, a decrease of 3.52%, and a year-on-year increase of 760,000 tons, or 13.72%. Meanwhile, Guangzhou Port's inventory on August 7 was 3.545 million tons, an increase of 110,000 tons over the previous month, an increase of 3.2%, and an increase of 517,000 tons over the previous year, an increase of 17.07%.

Investment advice

In terms of electricity, the bank continues to be optimistic about the targets of thermal power transformation to new energy operations, including Gansu Energy, Jingneng Electric Power, Shanghai Electric Power, Huadian International, Huaneng Power, and China Resources Electric Power. The prudential standards recommend China Nuclear Power, Three Gorges Energy, and China Fujian Energy. In addition, the bank also recommended Changjiang Electric Power, a leading hydropower company with steady operation, and Sichuan Investment Energy, which has benefited from the continuous improvement in electricity prices in the provincial market

risk analysis

The risk of rising coal prices; the risk of falling hours of regional utilization; the risk of falling electricity prices; the risk of new energy installations falling short of expectations; and the risk of fluctuations in the output of new energy sources.