PRC Metals & Mining

The supply-side reaction — Finally, some Shanxi-based coking coal minersdecided to cut output last week amid delayed payment by end-users and highinventories. Risks of short-selling Chinese coking coal stocks is high now as 1)supply-side reaction may limit the price downside in the near-term, and 2)valuations are close to previous lows in 2008 on PE and EV/reserve, suggestingnegatives are largely priced in. We reiterate our Buy (1H) rating on Hidili for itsimproving near-term outlook