January Indonesia coal production declined nearly 30% year-over-year; coal mining and processing stocks surged on opening, with Shaanxi Black Cat hitting the daily limit up.

(Source: Caixin)

If the Strait of Hormuz is blocked for an extended period, global coal demand for electricity could increase by 84.86 million tons annually; if China’s coal chemical plants operate at full capacity, this alone could boost domestic coal consumption by nearly 50 million tons.

On March 19, coal mining and processing stocks opened higher. As of the time of writing, Shaanxi Black Cat (601015.SH) hit the daily limit, Dayou Energy (600403.SH), Shaanxi Coal Industry (601225.SH), JinKong Coal (601001.SH), China Shenhua (601088.SH), and Baotailong (601011.SH) also rose.

Recently, the conflict in the Middle East has continued to escalate, prompting Iran to block the Strait of Hormuz. The energy market sentiment has been fully ignited, with energy substitution effects strengthening. Recently, the coal chemical sector led the gains. On March 12, Iran’s new Supreme Leader, Ayatollah Khamenei, made his first statement via national television, saying Iran will continue to adopt strategic measures including blocking the Strait of Hormuz and, if necessary, opening new fronts.

Changjiang Securities estimates that if the Strait of Hormuz remains blocked long-term, global coal demand for electricity could increase by 84.86 million tons annually; if China’s coal chemical plants operate at full capacity, this alone could drive domestic coal consumption by nearly 50 million tons.

Additionally, as the world’s largest thermal coal exporter, Indonesia has experienced an unexpected supply contraction. By January 2026, the country’s coal production fell nearly 30% year-on-year, reaching the lowest level since early 2022. Exports also declined simultaneously, especially exports to China, which dropped by 36.1% month-on-month.

Shanxi Securities points out that Indonesia’s supply outlook remains highly uncertain. Coupled with the ongoing escalation of the US-Iran conflict, the global coal supply and demand may enter a phase of tension, further supporting prices.

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