Oil-coal ratio and gas-coal ratio have far exceeded the center level since 2023, with coal presenting counter-seasonal tail-end market movements

According to Caixin, since March, due to regional geopolitical tensions, energy products such as oil and gas have experienced significant price increases, boosting market confidence in coal prices.

Rising oil and gas prices have, to some extent, driven increased demand for coal: first, soaring natural gas prices have prompted some regions in Europe and the U.S. to restart coal-fired power generation as a substitute for expensive gas; second, rising fuel costs have increased shipping expenses, thereby raising the landed cost of imported coal and enhancing domestic coal price competitiveness; third, disruptions in the Middle Eastern chemical supply chain will stimulate domestic coal chemical industry demand, with full-capacity operation of coal chemical plants potentially boosting domestic coal consumption by nearly 50 million tons.

Relevant institutions point out that the current oil-to-coal and gas-to-coal ratios have risen to 3.36 and 3.65 respectively, well above the central levels since 2023. In extreme cases, if oil prices rise to $150 per barrel, thermal coal prices could potentially increase to 1,000 yuan per ton. This price ratio effect has already appeared in the market; as of March 8, during the spring coal demand off-season, the price of 5500K thermal coal increased by 10 yuan per ton compared to mid-February, showing an out-of-season upward trend.

Meanwhile, domestically, policies since 2024 have continued to promote the “anti-involution” of the coal industry. In July 2025, the National Energy Administration issued Document No. 108, ordering shutdowns and rectifications of overproducing coal mines, effectively reducing coal capacity. Additionally, policies promoting clean and efficient coal utilization are ongoing, accelerating the exit of outdated capacity.

Looking ahead, the China Coal Industry Association forecasts that by 2026, the domestic coal market will generally balance supply and demand with phased tightness, and the central price of thermal coal is expected to remain stable or even rise. The IEA predicts that demand from emerging markets such as India and Southeast Asia will continue to grow rapidly before 2030.

Specifically, in the A-share market, the “anti-involution” effect is evident in the coal sector. Since the release of Document No. 108, coal production has significantly contracted, alleviating market pessimism. As supply and demand improve and coal prices rise, profit expectations for the sector are expected to improve markedly, with valuation repair potential. Investors may focus on high-dividend stocks and companies involved in both coal and coal chemical industries. (Everbright Securities Micro News)