Guotai Junan Futures: Fundamentals combined with news factors, both thermal coal and coking coal fluctuate with a slight upward bias

The recent bullish momentum in coking coal is driven by two main factors: First, on Monday, news circulated that Mongolia is facing limited coal shipments due to shortages in gasoline and diesel supplies. Feedback from investigations indicates that there is no oil shortage locally, and the underlying driver behind the shipment restrictions is not just the superficial impact of rising transportation costs, but also the strategic considerations of Mongolia’s Da Ta Mine actively controlling output to maintain prices. It is expected that the loading at the mine mouth will continue to be affected. Second, the market has once again mentioned supply-side reforms. However, from the perspective of how this incident is developing and its industry-wide impact, we believe it is more of a short-term emotional disturbance. On one hand, the number of new coal mines since 2015 has been relatively small, and due to the demand for supply assurance, the rigid demand downstream has also suppressed irrational price increases. On the other hand, after the rise in upstream industrial product prices, it is difficult for the costs to continue passing down to the consumer level, lacking positive industry-driven momentum. Therefore, overall, short-term coking coal prices still have some upward potential, but the upside space needs to be monitored continuously. It is recommended to hedge future price pressures by combining multiple positions in the 09 contract with selling out-of-the-money call options to create a bullish spread and manage the price suppression during the futures and spot arbitrage entry. (Guotai Junan Futures)