According to the Securities Times app, Morgan Stanley Fund stated in a document that since late September, various national ministries have put forward a series of measures to expand currency, stabilize the stock market, and support real estate, greatly boosting market confidence. Among them, interest rate and reserve requirement cuts are expected to increase currency supply, promote investment to drive coal consumption, lower existing house mortgage rates to stimulate real estate consumption, and drive demand in the black sector. Currently, both thermal coal and coking coal prices are relatively low. With improvements in macroeconomic expectations and gradual implementation of future policies, as well as demand improvement, coal prices have significant upward elasticity.

In addition, the central bank's new securities, funds, insurance companies' swap facilities and special refinancing tools guide listed companies to buy back shares and major shareholders to increase shareholdings. With the stable and high dividend characteristics of coal stocks, coal stocks are expected to continue to receive fund allocations. In summary, we believe that the coal sector has both cyclical resilience and stable dividends, and is currently experiencing resonance between fundamentals and policies. It is important to pay attention to sector layout opportunities.

Morgan Stanley Fund stated that reviewing the performance of the coal sector since the beginning of the year, from the beginning of the year to early March, the CITIC coal index rose by about 20%. The main driving force for the increase was the low market confidence, with coal and other high-dividend assets of certainty being sought after. From mid-March to the end of June, coal was in the off-season with no obvious contradiction, and the index showed narrow fluctuations. From July to early September, the index fell, almost giving up the year's gains, mainly due to weak performance of coal prices in the peak season. In June and July, the peak price of Qinhuangdao Q5500 thermal coal did not exceed 900 yuan per ton, leading some investors to further bearish future coal prices. However, in September, coal prices once again withstood the pressure test, not falling below 830 yuan per ton, driving the index to a strong rebound at the bottom by 15%.

Looking at the operation of the industry, thermal coal in the first three quarters of the year had a relatively balanced supply and demand, with coal prices fluctuating within a narrow range. On the demand side, from January to August 2024, total electricity consumption in the whole society increased by 7.9%, a growth rate 2.9% higher than the same period last year. Emerging industries such as electric vehicles, electronics and communications equipment, and photovoltaic equipment contributed significantly to the growth of electricity consumption in China. However, due to the good performance of hydropower this year, coal-fired power generation in May to July experienced a year-on-year decline. From January to August, coal-fired power generation increased only by 1.0% year-on-year, down 5.1% from the same period last year.

On the non-electricity demand side, overall growth is maintained, but downstream differentiation is evident. Benefiting from the sustained high price difference between oil and coal and the release of new capacity, coal consumption in the chemical industry from January to August increased by 19.4% year-on-year. Building materials and metallurgy were affected by the real estate sector, with coal consumption declining by 9.3% and 4.2% respectively. On the supply side, from January to August, the total domestic raw coal production was 3.05 billion tons, a year-on-year decrease of 0.3%, with Xinjiang increasing by 15.2% year-on-year, Shaanxi and Inner Mongolia increasing by 1.8% and 4.2% respectively, and Shanxi reducing production by 84.8 million tons due to safety production aid at the beginning of the year, a year-on-year decrease of 9.6%. Imported coal totaled 0.26 billion tons from January to August, an 8% year-on-year increase.

Morgan Stanley Fund believes that coking coal showed a weak supply and demand situation in the first three quarters of the year, with coal prices fluctuating widely and the overall price center shifting downwards. On the demand side, crude steel production in China from January to August decreased by 3.6% year-on-year to 0.77 billion tons, with cumulative pig iron production of sample enterprises down by 4.7%. On the supply side, cumulative weekly output of sample coking coal enterprises decreased by 3% year-on-year, while imports increased by 27%. In the downstream in July and August, due to weak demand in the black industry and the switch to national standards for rebar, steel prices accelerated their decline and transferred to the upstream, adjusting coking coal prices accordingly.