Trump suddenly makes a big move: Betting on fossil fuels! Coal stocks move collectively.

Trump bets on fossil fuels!

According to foreign media reports, U.S. President Trump will instruct the Pentagon to sign contracts with coal-fired power plants in an effort to revive the coal industry. The plan will be announced via an executive order. Additionally, Trump may also announce a plan by the U.S. Department of Energy to provide $175 million in upgrades to six coal-fired power plants.

Before the U.S. stock market opened on Wednesday, several coal stocks surged, with Peabody Energy rising nearly 4%, Cloud Peak Energy up over 2%, Core Natural Resources (CNR), and Warrior Coal up more than 1%.

Notably, today (February 11), coal stocks in the A-share market collectively rose. By the close, the coal sector gained over 1%, significantly outperforming the broader market index. This marks the third consecutive trading day of gains for the A-share coal sector. Some brokerages suggest that in the medium to long term, as expectations of overseas supply contraction strengthen and downstream demand recovers, coal prices are expected to gradually stabilize and rise.

Trump makes a major move

According to Bloomberg, U.S. President Trump plans to announce a measure to use government funds and Department of Defense contracts to maintain the operation of U.S. coal-fired power plants, aiming to increase domestic reliance on fossil fuels.

The report states that a White House official revealed this core plan will be announced via an executive order on Wednesday local time. Trump will instruct Secretary of Defense Pete Hegseth to sign power supply agreements with coal-fired power plants to provide electricity for military operations.

Furthermore, Trump will also announce a $175 million funding plan from the Department of Energy to upgrade six coal-fired power plants in Kentucky, North Carolina, Ohio, Virginia, and West Virginia. The DOE announced related funding arrangements last year, stating that the move aims to improve efficiency and extend the operational lifespan of coal plants.

When Trump announced these measures, industry executives, miners, and energy industry leaders will be invited to the White House. Bloomberg pointed out that this marks Trump’s latest effort to revive the struggling coal industry, more than a decade after he first promised during his initial campaign to “bring miners back to work.”

This move comes as the Tennessee Valley Authority plans to delay the retirement of two coal-fired power plants. Even before Trump took office, some power companies had begun seeking to extend the operational years of coal plants. With support from Washington and the surge in electricity demand driven by the AI industry, this trend has become even more apparent.

This is Trump’s second effort since becoming U.S. president to boost the coal industry. Since his first presidential campaign in 2016, Trump has been a staunch supporter of coal, promising to bring miners back to work.

Coal stocks move collectively

In recent trading days, the A-share coal sector has continued to rise. Today during trading, the sector initially fell by 1%, but then rebounded in a V-shape, with gains approaching 1.6%. By the close, the sector overall gained nearly 1.3%, with Jiangxi Tungsten Equipment hitting the daily limit, Shanxi Coking Coal rising nearly 8%, Yankuang Energy up nearly 5%, and companies like Lu’an Environmental Energy and Haohua Energy also climbing.

Market analysts suggest that the recent strength in coal stocks may be related to price increase expectations. The Indonesian government plans to cut coal production from 790 million tons in 2026 to about 600 million tons, a 24% year-on-year decrease, mainly to stabilize international coal prices. After Indonesia announced this plan, some Indonesian miners have paused spot coal exports.

Zheshang Securities pointed out that if Indonesia’s production quotas are strictly enforced, global thermal coal supply will tighten, potentially reshaping the global coal supply and demand landscape, with a significant rise in the coal price center. Domestically, social inventories are declining, and approaching the Spring Festival holiday, coal companies are taking holidays, and policy regulation may impact supply. Coupled with the demand peak after the holiday in March, coal prices are expected to rise.

Some coal companies have already announced their 2025 performance forecasts. Founder Securities believes that coal prices in 2025 will be generally weak, with the bottom of coal industry performance basically established. Future performance will gradually improve as the coal price center rises.

Kaiyuan Securities states that current prices for thermal coal and coking coal remain at historic lows, providing room for a rebound. With supply-side policies to curb excess production and demand entering the heating peak season, the fundamentals of coal supply and demand are expected to continue improving. Both types of coal have upward price elasticity. Thermal coal is supported by long-term contract mechanisms and the logic of profit sharing between coal and thermal power companies; coking coal, with a higher degree of marketization and greater sensitivity to supply and demand changes, may show greater price elasticity. The coal sector has both cyclical and dividend attributes. Currently, coal holdings are low, the fundamentals have reached the right side of the turning point, and it is an opportune time for deployment.

Guotai Haitong Securities is optimistic about the upward trend of global coal prices. The cycle bottom for the coal sector was confirmed in Q2 2025. The supply and demand pattern has already shown a reversal inflection point, and it is expected that from 2026, coal and downstream major demand sectors like thermal power will enter a new upward cycle, making it worth looking forward to.

(Article source: Securities Firms China)