In the context of energy substitution, can coal make it to the table?

On March 26, the coal ETF (515220) rose by 1.18%, with a net inflow of over 1 billion yuan in the past 10 days, becoming one of the few sectors showing gains.

Source: WIND

The global energy market is currently undergoing profound restructuring, with international oil prices soaring. Under the resource endowment of “rich in coal, lacking oil, and less gas,” the strategic value of coal as an energy stabilizer and key substitute continues to stand out.

From an industrial transmission perspective, the rise in oil and gas prices is catalyzing coal demand through three pathways: first, the direct substitution effect of coal for oil and gas; second, the recovery in coal chemical profits driving an increase in production load; third, the surge in global shipping costs raising the cost of imported coal, highlighting the cost-effectiveness of domestic coal.

Overall, although it is currently the off-season for coal use in the domestic market and coal inventories are not low, there are signs that spot coal prices are gradually stabilizing. Coupled with railway maintenance, restrictions on imports, and demand from coal chemicals, coal prices may exhibit characteristics of “not weak in the off-season.”

It is worth noting that the stock prices in the coal industry have already incorporated many expectations of rising coal prices. Once geopolitical conflicts ease and oil prices fall, market sentiment may quickly reverse. Moving forward, it is essential to closely monitor three signals: geopolitical situation, crude oil trends, and Indonesia’s coal import situation.

Risk warning:

Investors should fully understand the differences between regular fixed investment and zero deposit savings methods. Regular fixed investment is a simple and practical investment method that guides investors to make long-term investments and average investment costs. However, regular fixed investment cannot avoid the inherent risks of fund investment, cannot guarantee profits for investors, and is not an equivalent financial management method to replace savings.

Both stock ETFs/LOF funds belong to securities investment funds with relatively high expected risks and expected returns, with their expected returns and risk levels higher than those of mixed funds, bond funds, and money market funds.

Investing in stocks from the Sci-Tech Innovation Board and the ChiNext will face unique risks due to differences in investment targets, market systems, and trading rules, which investors should be aware of.

The short-term fluctuation of the sector/fund is listed only as supporting material for the article’s analysis and is for reference only, not constituting a guarantee of fund performance.

The short-term performance of the mentioned individual stocks is for reference only and does not constitute a stock recommendation, nor does it predict or guarantee fund performance.

The above views are for reference only and do not constitute investment advice or commitment. If you wish to purchase related fund products, please pay attention to the relevant regulations on investor suitability management, conduct risk assessments in advance, and purchase fund products that match your risk tolerance. Funds carry risks, and investments should be made cautiously.

Daily Economic News

(Author: Zhang Xiaobo)

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