GTHT has released a research report stating that on August 10, the National Development and Reform Commission and the National Energy Administration officially released the 15th Five-Year Plan for the Coal Industry Development. The supply logic has shifted from "ensuring supply and increasing production" to "controlling incremental capacity, clearing inefficient stock, and strengthening reserves," with the focus no longer on expanding production scale but on supply quality and resilience construction.
On the demand side, the plan sets a tone of peaking coal consumption and a soft landing for the high plateau, rejecting a cliff-like reduction in coal use, which provides resilience to the demand base. This is a medium-to-long-term positive for the coal price center to remain in a reasonably high range, with a higher certainty of profit improvement for coal companies. GTHT's main views are as follows:
Key Event: On August 10, the National Development and Reform Commission and the National Energy Administration officially released the 15th Five-Year Plan for the Coal Industry Development. The core conclusion is that under the main theme of "establishing the new before abolishing the old," the plan clearly focuses on strict total capacity control, promoting the withdrawal of backward and inefficient capacity by region and category, a unified capacity ledger with strict replacement, prioritizing base and integrated projects, and improving price range regulation and long-term contracts. This substantially raises the compliance and safety thresholds for the supply side, making a narrowing of medium-to-long-term supply elasticity highly probable. Combined with price and reserve systems, it will make the industry's operating center more stable and fluctuations more moderate.
The supply logic has shifted from "ensuring supply and increasing production" to "controlling incremental capacity, clearing inefficient stock, and strengthening reserves," with the focus no longer on expanding production scale but on supply quality and resilience construction. During the 14th Five-Year Plan's supply guarantee cycle, measures like capacity expansion, renovation, and integration were relatively flexible to address supply gaps, allowing some small and medium-sized mines to expand capacity through technical upgrades. This plan, on one hand, uses a negative list to block low-quality incremental capacity at the source, and on the other hand, formally includes "inefficient capacity" in the withdrawal category, promoting the actual cancellation of long-term suspended or mothballed zombie mines, thereby reducing the "illusion of nominal capacity" in the market. In the past, when coal prices rose, the market would often trade on the expectation of a large number of zombie mines resuming production, but this disruptive factor has been institutionally weakened.
"Establishing the new before abolishing the old" is the highest principle for withdrawal, preventing both campaign-style shutdowns and disorderly production resumption and expansion, thereby smoothing out the risk of large swings in supply. The principle of "establishing the new before abolishing the old and coordinating regional supply assurance" means that the pace of mine withdrawal must match the progress of advanced capacity replacement, avoiding the spike in prices that would come from concentrated shutdowns. At the same time, it will not allow the disorderly resumption of low-quality mines to ensure supply, reducing the probability of past industry-wide overcapacity races and deep coal price declines, thus reinforcing the price floor.
Strengthening constraints on new additions may reflect a policy expectation of lowering the scale of new capacity during the 15th Five-Year Plan period. The plan improves and perfects coal industry policies, strictly enforces industry access requirements, and proposes that Shanxi, Shaanxi, Inner Mongolia, and Xinjiang will generally no longer approve new or expansion projects with a capacity below 1.2 million tons per year. This is combined with multi-dimensional constraints on disaster conditions, mining depth, and ecological red lines. Future new capacity must simultaneously meet multiple conditions, including the unified capacity ledger, capacity replacement, and a negative access list. Furthermore, the plan proposes establishing a capacity reserve of over 100 million tons per year, which is a significant reduction from the 3 billion ton target proposed in 2024. Theoretically, reserve capacity is 30% of new capacity, which may reflect a policy adjustment to lower the medium-term scale of new capacity.
On the demand side, the plan sets a tone of peaking coal consumption and a soft landing for the high plateau, rejecting a cliff-like reduction in coal use, which provides resilience to the demand base. Coal power is shifting to a regulatory and supporting power source, while the intermittency of wind and solar still requires coal as a backup. Industrial and coal-to-chemical coal use provides structural support. Consumption is not declining rapidly but fluctuating on a high plateau, strengthening the underlying logic of a tight supply-demand balance.
Investment Recommendation: The medium-to-long-term outlook is positive for the coal price center to remain in a reasonably high range, with a higher certainty of profit improvement for coal companies.
Risk Warning: Macroeconomic performance falling short of expectations, and domestic production cuts falling short of expectations.