2018 The growth rate of coal consumption continued to rebound this year, driven by the recovery of energy consumption elasticity and a temporary slowdown in the adjustment of the energy mix. However, on the supply side, as capacity and inventories naturally clear out and expansionary investments remain weak, the growth rate of production will decline significantly. As a result, the supply-demand gap will widen markedly this year. Meanwhile, the world is facing a severe coal shortage, causing prices to keep rising rather than stabilizing or remaining at high levels as previously expected.

　　The effective production capacity on the coal supply side is significantly insufficient, and output growth remains remarkably weak, confirming our earlier prediction that output growth would slow down markedly after the supply adjustment is complete. According to the National Energy Administration, as of... 2017 Year 12 At the end of the month, all production coal mines nationwide will have obtained all necessary permits and licenses, including the safety production license. 3907 Location, production capacity 33.36 Hundred million tons / Year; coal mines that have been approved (approved) and have commenced construction 1156 Facility (including simultaneous renovation and upgrading projects for producing coal mines) 83 Location, production capacity 10.19 Hundred million tons / year, including coal mines that have been completed and entered into joint trial operation. 230 Location, production capacity 3.57 Hundred million tons / Year. We are in 16 By year-end, it was clearly pointed out that the legally valid coal production capacity is only... 33 Around 100 million tons, so we’re seeing the disclosed information about coal mine production capacity. 33.36 Hundred million tons / The actual situation over the past nearly two years (the impact of capacity reduction has been minimal; most of the capacity reductions have involved zombie companies that are essentially ineffective). 33 Hundred-million-ton production capacity distance 17 Annual coal consumption 38.61 Hundred-million-ton difference 5.25 Hundred million tons—legally valid production capacity is severely insufficient; furthermore, we rely on imports to make up the shortfall. 2.7 100 million tons ( 17 year) coupled with illegal and non-compliant activities, overcapacity production, and the difficult balancing of digesting social inventories—on the other hand, illegal and non-compliant activities and overcapacity production... 80%-90% It is contributed by the coal mine undergoing joint trial operation, thus determining its production capacity. 33.36 Considering the combined effect of hundreds of millions of tons, net imports, and illegally produced output, essentially no new production capacity has been released.

　　The off-season demand remains robust, and inventories have begun to decline across the board ahead of the peak season, validating our annual strategy’s ongoing assessment of demand-side resilience. This week, daily coal consumption at the six major coastal power plants continued to rise, as of... 11 Daily average consumption within the week 68.86 Ten thousand tons, compared to 17 Same period of the year 61.03 A ten-thousand-ton increase 7.83 Ten thousand tons, increase rate 12.84% Average daily coal consumption in the early to mid of this month 67.12 Around 10,000 tons, compared to... 17 The same period of the year 59.87 A ten-thousand-ton increase 7.25 Ten thousand tons, increase rate 12.10% On the other hand, 2017-2018Q1 The elasticity coefficients of coal consumption are as follows: 0.15、0.31，4 The growth rate of total social electricity consumption in the month is... 10% Above all, and considering that energy and electricity consumption are gradually entering their peak season with the onset of summer, we expect coal consumption to increase further, and the elasticity between thermal power generation and coal consumption continues to rise, as confirmed by empirical evidence. Looking at the number of days’ worth of available inventory at power plants based on daily consumption levels, 5 Moon 11 Day of the month 20 Around the sky and 2017 Similar to the same period last year, so current power plant inventories... ( Inventory level 1330 Ten thousand tons, compared to 2017 Higher than the same period last year 140 Ten thousand tons ) The price is actually at a relatively reasonable level—not excessively high—and has recently begun to decline. Moreover, the bottom of the market coal price has clearly been rising. Driven by strong global coal demand and constrained supply, import coal prices have risen significantly. This week, the average price of Newcastle thermal coal... 101.65 U.S. dollar / Ton, year-on-year increase 35.44% Monthly month-on-month increase 9.68% Imported coal prices continue to rise, and power plants are currently facing a situation where they must maintain their inventories despite robust demand. If downstream enterprises intend to reduce their inventories, there is a significant risk that, as the peak season approaches, they will rush to replenish stocks at sharply higher prices. Therefore, at this stage, power plants need to keep up their steady procurement efforts to maintain current inventory levels, which in turn has led to a bottom-up rebound in coal prices. Taking into account... 2018 The peak coal price for the year has already been reached. 2 Monthly breakthrough 2017 As the year progresses, it has indeed been confirmed that the supply-demand gap will continue to widen this year, with both the lower and upper price levels steadily rising. Consequently, the central tendency and marginal prices of coal this year are undoubtedly set to rise with certainty.