Coal news and updates

China coal sector price war is over: JP Morgan

J.P. Morgan analysts Daniel Kang and Waiyin Karen Li believe the price war amongst China’s coal producers started in the spring is now largely over and has moved to a Neutral stance on the sector:

    The domestic thermal coal price war that erupted in late June, causing a collapse of nearly 15% in prices, is now over. Triggered by the leading miners in an attempt to reclaim market share, the strategy successfully squeezed out high cost domestic producers and imports. Prices have stabilized and are now pushing higher as heavy producer destocking has rebalanced domestic markets. In the near term, we think coal prices are well supported by maintenance work at the key Daqin rail line, winter restocking and high-cost imports.

The broker upgraded Yanzhou Mining to Neutral, kept China Coal Energy (CCOZY) at Neutral. Its favorite company within the sector is China Shenhua Energy.

Source: Barron's