picks third quarter announcement. I am Jiang Qun, Board Secretary of China Coal Energy. Welcome to today's announcement. Joining us at this meeting are Executive Director and President of the company, Gao Shigang. Ms. Zhan Yanjing, Independent Non-Executive Director. Chai Qiaolin, CFO, as well as relevant heads and staff from the Securities Affairs Department, Planning Development Department, Finance Department, Coal Business Division, Chemical Business Division, Power Business Division, Marketing Management Office. I sincerely thank you all for your longstanding care and support for the company. Next, I will brief you on China Coal Energy's operation results for the first three quarters of 2026 and major work arrangement for the fourth quarter. Unless otherwise stated, all figures below are calculated in accordance with the Chinese accounting standards for business enterprises. First, operating results and features of the first three quarters.
In the first three quarters of 2026, China Coal Energy resolutely implemented the decisions and arrangement of the Party Central Committee and State Council and work requirements of the SASAC, faithfully practiced development approach of improving efficiency from existing assets and driving transformation through incremental growth, actively responded to various risks, and coordinated the production organization, maintaining a sound momentum in production and operation. We realized the operating revenue of CNY 115.636 billion, up 4.6% year-on-year. Total profit of CNY 19 billion, up by 4.9%. For the net profit attributable, it is CNY 12.7 billion, up by 2.1%. The basic earnings per share are CNY 0.96, up by 2.1%. Net cash flow from operating activities amounted to CNY 22.5 billion, an increase of CNY 1.46 billion, 6.9% year-on-year.
In the first three quarters, profit attributable to shareholders of the listed company under IFRS was CNY 12.884 billion, up by 15.26% year-on-year. There are the following features. First, production operation maintained stable and orderly in the first three quarters, faced with factors as relatively tight mining development continuity for some mines and changing underground geological conditions. The company scientifically coordinated the production and completed the production of 93.38 million tonnes. Although we made a lot of effort, we still faced some difficulties, and we also tried to improve the marketing strategy and tried to improve the efficiency and we finished the sales of 182 million tonnes, of which sales of self-produced commercial coal reached 93.59 million tonnes. We maintained stable and efficient operation, and we realized 4.62 million tonnes of major products.
We actively expanded the sales channels of chemical products and adhered to precise and categorized marketing and complete sales of 4.85 million tonnes. Second, prices of major products rebounded. In the first three quarters, prices of the major products such as coal and chemicals rose somewhat following the market trend. Average selling price of commercial coal was CNY 557 per tonne, up by CNY 83 per tonne or 17.5%. For thermal coal, it was CNY 514 per tonne, up CNY 76 per tonne or 17.4%. For coking coal, CNY 1,192 per tonne, up by CNY 271 per tonne, or 29.4%. For polyolefin, the sales price was CNY 7,258, up by 10.9%. For urea, CNY 1,694, down 4.2%. Methanol, CNY 1,963, up 11.7%. For ammonium nitrate, CNY 1,795, down by 0.7% year-on-year. Third, we have tapped into the potential and improved the quality efficiency.
We optimized the product mix and the average calorific value of thermal coal was up nearly 200 kcal year-on-year. Our comprehensive gross margin improved also year-on-year. Unit sale cost of commercial coal was CNY 299 per tonne, up CNY 41 per tonne year-on-year, affected by other factors such as decreased production and sales volume. For the PO, sales cost was CNY 5,865 per tonne, down by CNY 410 per tonne or 6.5% year-on-year. This was mainly because major overhauls were conducted in the same period last year with no such impact in the current period. Affected by factors such as rising purchase prices of feed coal and fuel coal, the unit sales cost of urea was CNY 1,323 per tonne, up 6.1% year-on-year. For methanol, CNY 1,402 per tonne, up 10.5%. For ammonium nitrate, the selling cost was CNY 1,546, up 8%.
Against the backdrop of a declining coal output and rigidly rising costs, we took multiple measures to offset the pressure and achieved a profit of CNY 1.98 billion. The major increasing factors are, first, the higher selling price of self-produced commercial coal, which increased the profit by CNY 7.7 billion. Second, the profit increase factor was chemical business, CNY 1.2 billion. For the decreasing factors, for example, the unit selling cost and also the sales volume of self-produced coal was also down. For the fourth quarter, it is the crucial stage for accomplishing the full-year targets and tasks. We will lay a solid foundation for a good start of the 15th Five-Year Plan. First, we will continue to deepen the production sales synergy and make every effort to stabilize output and make up for the shortfall.
Second, we will advance the construction of key projects and accelerate industrial transformation and upgrade. Third, we will strictly implement lean management and fully tap the space for cost reduction. Fourth, we will systematically strengthen the risk prevention and control and continuously improve the level of compliance. Fifth, we will make efforts to ensure safe production and ecological environmental protection and identify and examine problems. Distinguished investors and analysts, company's management, and all our colleagues will anchor our goals on proactively acting to firmly hold the bottom line of sales production and unswervingly advance the high-quality development, and we will respond with solid work and tangible achievements. Now we can start the Q&A.
If you have a question, please press star one if you're on the phone. If you are online, you can type your question in the chat box, or you can raise your hand. Thank you.
If you have any question, if you're on the phone, please press star one. If you are online, in the chat box, you can type in your question or you can raise your hand. Thank you.
8014, please provide your name and affiliation. Thank you.
Mr. Jiang and dear leaders. Hi, can you hear me?
Yes, please.
Hi, Mr. Jiang. My name is Lin Yao from Oriental Finance. I looked at your third quarter report, especially for the Q3 alone. We saw this clear sign that our cost was rising a bit, and I looked at the detail. The main rise came from the labor cost, and people are very interested about the future guideline of the cost. First, why was there a rise in the labor cost in Q3? Throughout the year and also into the future, can you provide some guideline on the cost?
Second, also related to cost, the expense and tax. In terms of the expense, we saw that in Q3, the financial expense and management expense also increased. On the tax side, in the interim reports, we saw that there had been some previous makeup for the tax and also the delayed cost, or demerge cost. The numbers were also rising there. What is our future outlook for the tax? I think, can we say Q3 tax level is our future new norm? The cost and tax. Thank you.
Thank you for the question. So [Hu] from tax will answer. [Ms. Hu].
Thank you for the question. The labor cost actually had some increase quarter-on-quarter because, for some of the production teams, we transferred from outsource to self-employed.
Also there had been some withdrawal of the bonus and that caused the quarter-on-quarter increase of labor cost. For Q3 and Q4 labor cost, in recent years, we have been refining and standardizing the cost control, and we have got some results. But it's not so scientific to press down the cost all the way or continuously because for some of the cost, the rigid part is over 60%. Now, in recent years, the safety requirement is getting more stringent and that also pulled up our fixed cost. Since our production and sales were down a bit, that also dragged down our ratio. In Q4, there are some uncertainties, and for the labor cost and maintenance cost towards the end of the year, they may also increase.
But according to the budget in the beginning of the year, we will try in the fourth quarter and throughout the year to scientifically manage the cost within the reasonable range. For the financial expense and also the income tax in Q3, compared to Q2, the quarter-on-quarter management fee fluctuation was partly due to the labor cost and there have been some quarter-on-quarter changes. For the income tax, due to the use of the funds. In the current term, if it's withdrawn but not used, we would increase the volume of the tax and if there is some because we are actually reducing the use of the special use of funds, so that is why the payable tax is increasing. For the financial expense, we have been strengthening our management.
For the debt with interest, the interest rate is actually going down of our company, and the increase is mainly about the unconfirmed financing costs, which is discounted and amortized, and that added to our tax, to our financial expense. That is also related to the cost of finance. In Q3, actually, the financial costs included both parts. Thank you.
Thank you.
Thank you, Mr. Chai. A very detailed answer. I just want to have a follow-up. You explained for the tax rate increase, it's related to the rule of the use of the safety and maintenance and patrol examination fee. For that adjustment, that happened after interim reports. Throughout the year, what is the impact of that on the overall tax rate or the percentage of the expense?
The special reserve was arranged according to the beginning of the year plan, and we use that within the range. For example, the under well modification and safety loophole checks and so on. We would look at our beginning of the year plan while using it, and also it is related to the production arrangement in Q3 and Q4. We expect that it would be around CNY 20 per tonne-CNY 25 per tonne. Thank you.
Maybe I was not clear about the question. I was not asking about the safety or maintenance check fees. It is like the tax rate adjustments. For example, in the past, there has been some tax discounts, but with the new rules, things can be fluctuation. We do have a lot of subsidiaries and affiliated companies.
According to the original tax rate, what is the overall change like for the company with the new rules? Did we calculate that? We expect that the influence would not be that significant on our report. Is that clear? It seems that it is not that significant. Hello?
I think maybe we can wait for the analyst to adjust the equipment. We can have the next one.
3783, please provide your name and affiliation. Thank you.
Dear leaders, good afternoon. Can you hear me?
Yes, please.
Okay. I am from Guosen. My name is Zhang Xiaoya. I have two questions. First, for the first three quarters, where are the lagging behind in production? In which mines? In which mines did we see the lagging behind of the production? Also for the Meikao production, what is the progress?
Then for Dahaize Mine, when can we see the recovery of production? Thank you.
For the coal production, Liu Xiangping from coal, then I will answer about the Dahaize Mine.
Hi. Thank you for the question. According to the feedback from January to September, for the commercial coal production was down in our company. The main reason was the accident after May 2nd, and that for some of the local authorities, they took over. Then for the distribution, the coal from Shanxi accounted for 65% of the commercial coal that we produced. Then, according to the authorities' requirements for the main production basis of coal, basically, we have seen more stringent safety regulations and the limit on our production is pretty significant, and that caused some production limits.
The other issue is for the coal mines, there are geological conditions at play down the well, and also considering the attribute of coal and overlaps with the regulation that caused the production downfall. For the following three months, the regulation is still very strong and the requirement is still very strict. We need to guarantee the supplementary production while not sacrificing the safety.
I want to add something. Several aspects. For Pingshuo, Huajin, and Shaanxi Company and Northwest Company, we had some gaps, and for the production gaps, on one hand, it is due to the geological changes of the mines. On the other hand, it is also affected by the stricter regulations. I just want to add something. In the first half of the year, partly it is because of the geological conditions that caused some of the production gap.
But if the policy would allow that, we would have made up for the gap. But now, due to the policy and regulations, our supplementary production was quite slow. So in Q4, we will try to actively make up, and of course, we also need to respond to the safety regulations. But whether we can catch up as planned previously, well, it depends on the actual situation of our work. So we will try, but things are still a bit uncertain. Secondly, for the renovated Dahaize. So according to Shaanxi authorities, and also according to sources, Dahaize Mine had serious loopholes, and we were instructed by local government to halt production for the accident. It is more due to the lack of management by Shaanxi Company on the outsource teams.
But the production halt is still unclear in terms of how long it is, but right now, it seems that the impact is limited. It is not a significant impact on the company. Thank you.
Thank you, Mr. Liu and Mr. Jiang. Very clear. Nothing else from my side. Thank you.
Next, 6999. Please ask your question, but please provide your name and affiliation. Thank you.
Dear leaders, can you hear me?
Yes, please.
I am from Kaiyuan. So I also have a question about Dahaize. So for Dahaize, in the past, it has a reserved production capacity of 400 million tonnes or four-o-o. So what was that like in the previous years and, in this year, how is Dahaize affecting the production volume? I do not know about Dahaize 2. What is the progress of Dahaize 2?
I also have two other questions, but please answer this one first.
Okay. Let me answer the first question. Yes, there is the emergency reserve production capacity. But right now, the policy does not allow it to release that. Following this, we will consult with NDRC in terms of the production arrangement. So of course, we would want to not release Dahaize, but the reserve capacity of other mines. So that will be very favorable in terms of making up for the production gap. Then for the early phase of Dahaize, for the Dahaize number 2. Yeah. Planning department, please.
Yeah, we are arranging the early phase procedures, and now we are doing the overall planning and also the environmental impact assessment. According to the environmental authorities for Yulin and Ordos, we are evaluating the impact of the groundwater, in those two places.
After that, we will start the next phase of the overall planning. Thank you.
Okay. Thank you. So another question about Wangjialing Mine. Due to the coal bed changes, there had been some impact on the production. So right now, what is the annual production like?
Liu Xiangping from coal, please.
Thank you for the question. For Wangjialing Mine, the compliant production rate is 7.5 million tonnes. So from January to September, there have been some gaps. The main reasons are, at the time, in 2021, we actually did some recalculation for it to go from 6 million tonnes to 7.5 million tonnes. For several years, the production was pretty high, but things got tighter after that. Also after May 2nd, the regulation was more stringent, and we had seen some production halts.
When we are trying to mine even deeper, there are some new requirements of shorter sessions in the tunneling. Right now, due to all the factors, there have been some production gaps. But in next year and the year after next, Wangjialing will still arrange the production according to the 7.5 million tonnes capacity. Now, with the tension getting more eased, we will try to maintain stable production. Thank you.
Another question, also about Dahaize Mine. Following this, for example, in terms of the regulation or the compliance, what will the cadence be like? Do we have any expectation for that?
For Dahaize 2, we are still progressing the work. But we do not have a clearly defined timeline yet. Sorry, I was actually asking about the Dahaize 1 or the 1N halt.
Actually, we are consulting, but it is hard for us to judge. Of course, we want it to be as short as possible.
Thank you for the answer.
Okay, thank you for the answer. Next, the tax question. From third quarter report, how does the cost affect? Which will go towards amortization and the impact on finance by transportation, logistics, and all the other factors?
I am sorry. Can you repeat the question? It was pretty quick. Like per tonne margin. Can you go slower?
Seeing from Q3, the per tonne margin, price cost, and also the sub-cost items, which are more amortization or logistics or port and so on. What are the relevant impacts?
Finance, [Ms. Hu], please.
Thank you. For the self-produced commercial coal gross margin. The price was up, and we had an increase of CNY 7.7 billion.
The coal price was up in the first three quarters, and we also tried to improve the quality, and the price went up by CNY 83 per tonne. The total was CNY 7.7 billion. Then for the cost increase, there was a minus of CNY 3.8 billion. Back then, the cost was CNY 297 per tonne, so up by 41%. As we reported, the production volume was down a bit. The impact was CNY 1.3 billion. In terms of the cost elements, most of the cost items are affected by the production volume decrease. The unit cost was up. For example, for material cost, it is kind of a mixed cost, labor cost, and also amortization and depreciation, fixed cost, and transportation and port, that is variable cost. For other costs, mostly it is the reduction of the use of the special funds.
For the first three quarters, the cost was up mainly due to the production volume decrease and also the reduction of the use of the special fund. It was like CNY 40 per tonne. Apart from the two, not a lot of changes in the cost. Thank you.
Thank you for the question and the answer. Next question. According to the first three quarters, in Q3, the self-produced commercial coal cost was more than CNY 200 per tonne, so up by CNY 31 per tonne. For labor cost, it went from CNY 52 per tonne to CNY 83 per tonne. Basically, that covers the whole increase. Then for the sales volume, basically, it was breaking even. It was not just amortization. What is the reason? Also, will that go down in Q4? Thank you.
In Q3 compared to Q2, there was a cost increase of CNY 31 per tonne. Labor cost did go up.
Some of the companies, they withdrew the bonus, and that added to the cost. Also there are some other costs. For example, the surplus of special fund was higher than before. In Q4, we will of course urge the companies to press down the cost and also make full use of the fund. But as we said, we have some uncertainty on this production and volume, and also at the end of the year, the labor cost and maintenance cost may see some increase. In Q4, there is serious tasks in trying to control our cost. We will try to scientifically manage the cost throughout the year. Thank you.
Thank you, dear leaders, for the answer. Next question. In the coal industry, we are trying to shift towards the supportive energy. And right now, there are smart mining upgrade and so on. Independent director.
How do we view that kind of transition? How will you try to supervise the company to try to utilize the financial toolbox and try to respond more responsibly to the small shareholders?
Now if we look at the valuation, you can see that we went from the high place to the current level. We think that is a normal trend. At first, the high point was related to the Middle East, and then the situation was more due to the independent or domestic situation. Also we are faced with the work safety issue. Right now for our share price, we think that it is normal and reasonable. Second, in terms of the valuation management, we have done a lot.
Last year after the new National Nine Articles, there was the valuation management method, and also other methods like, for example, creating value to improve the performance and stabilizing the quality, and also to support emerging industries. In terms of reporting, for our dividend payout, we went from 30% to 35%. We think that is a very good level, and we also urge the management to make full use of the policies and the toolbox to also manage our valuation better, and also return better to our mid- and small-sized shareholders and stabilize our production to give them more certain expectations.
Thank you for the answer. Next question. Q3 report showed the increase of R&D cost and a lot went to the coal-based new material. For those proactive projects, how to identify the capitalization rate or the CapEx?
When looking at the long-term return and the shareholder return, how do we do risk management? Thank you.
Thank you for the question. According to the internal control and also the financial method, our R&D cost is of course divided in the research and the development phase. According to the accounting standard, only the ones that can get into CapEx will go into CapEx. We have been increasing the research and development cost on the new quality productive force. From the BOD perspective, for all of the projects, we need to go through the feasibility study, and we need to go through the board approval. The high investment or for the long-term projects, they are part of the transition of the company. We can see that the production or the product structure of the company had always been improving.
From the BOD, we will look at the benefit, the return, efficiency, and risk to maintain sustainable growth of the company. Thank you.
Just now for the R&D expense, let me add something. For the R&D expense, we cannot say that most of it went to coal-based new material. Actually, it went to our main business, like coal chemical, and the coal mining equipment. In that, of course, we had covered some in the coal-based new material, but we cannot say the majority went to that. Also, I think the data may be problematic because in Q3, what we disclosed, the R&D cost went up by 5.9%. Maybe finance department can also, if needed, finance department can communicate further.
Thank you for the answer. Next question. For the first three quarters of CNY 610 million non-operative expense, especially for the overdue cost.
Did we conduct the compliance review and the finance report process, and are there any loopholes in terms of the controlling management?
In Q2, I already explained the questions. If you need further explanation, the finance can further communicate. Secondly, from the BOD perspective, we did not find any loopholes in the compliance and efficiency and other areas. Let me add something on the non-operative expense. You said that CNY 610 million. It is mostly due to the tax special project to make up for the overdue fees. That is because of the difference in terms of the implementation methods of the tax. Actually, there is no administrative punishment involved. For the depreciation, and for the cost of asset retirement, it is already distributed in different departments. They have gone through the retirement process.
The next question for Dahaize 2, what is the progress like, and the commissioning date and progress? Thank you.
Thank you for the question. For Dahaize 2, we have already answered that, so I can repeat that. For Dahaize 2, we are actively progressing the overall planning and also the EIA. According to the Ministry of Ecology and Environment, Yulin and Ordos is conducting the evaluation on its impact on the groundwater. After the evaluation, we will further progress the overall planning. For the progress, we still need to wait for further notice. For Pingshuo, Mayingbao and Fengyu well. They are in the South Shuonan mining zone. We have conducted the geological survey already, and up to now we have finished 8 x of well reservation so it is valid towards October 2028.
Since that mine zone is in the reserved water zone. If we need to carry on, we need the approval of the water authority and the local government is coordinating that process. Thank you.
Thank you for the answer. Next question. Pingshuo's resource acquisition and the progress. Just to clarify, which part of the resource are in Pingshuo?
Let us talk about Antaibao zone. For the work there, we are actively progressing. We expect that in the near term or at the end of this year or the beginning of next year, there may be some breakthroughs. We can see some clear progress. For the other reserve zones in Pingshuo, I think the previous answer already covered that, Fengyu Mayingbao. We are also progressing the work. But of course, it involves different approvals, so we are progressing according to plan.
Okay, thank you for the answer. Then three small questions. The first question, in Q3, the coking coal price had seen some rise. Then for the affiliated company, the return was down a bit. What was the reason for that and the outlook for Q4? Thank you.
Hello. For the affiliated companies, apart from coal investment, there are also some power plants. With the power price increasing, some of the power generation companies had a lower margin.
Okay. The second small question was the outlook of dividend. Then the third question, in Q4 and throughout the year, the outlook on the per tonne coal, of course.
Can you repeat the two questions?
The second question was the outlook on dividend. The third question.
Can you repeat? Can you hear me? Can you hear me? Can you hear me? The second question and the third. Please repeat.
Okay. Second question, the dividend outlook. Third, in Q4 and throughout the year, the self-produced coal per tonne cost.
For the dividend. Let me answer. We are also balancing the return on the future development. We are still trying to maintain a stable dividend policy. Recently, since our FPO, our dividend payout had always been above 30%. Recently, to respond to the call on improving the quality of listed company finance and also to respond to the expectation of the shareholders, we took two measures. One, the annual dividend payout was raised from 30% to 35%. We also increased the frequency of the dividend payout, and for three years in a row, we had interim dividend payouts. At the end of this year, the dividend payout would be confirmed by BOD at the beginning of next year.
Also, we expect very stable dividend payout, but as for the detailed ratio, it depends on our confirmation. But we are committed to providing stable feedback for the shareholders. The third question, finance please.
The cost in Q4, right? And throughout the year, the cost expectation is that we will maintain very scientific and reasonable management on the cost. Let me add something. For the cost, China Coal Energy had always been dedicated in managing the cost, but sometimes the cost has its rigid part. In Q4 for the company, at the end of the year, we are faced with the closure of finance. According to our previous years, sometimes there can be some fluctuation on the cost, but it depends on the production in Q4.
For example, right now we are trying to expand our production scale, but still there are uncertainties in the production and sales, so that can cause some impact on the cost. Thank you.
Thank you. Next question. In the next three years, any planning for the production and sales?
Coal division, please.
Thank you for the question. Let me answer about the coal, the trend in coal. If we look at 2026, we have 25 coal mines in production or being built. The total production capacity is 168 million tonnes. We have 23 mines in production with a capacity of 161 million tonnes. For the coal mines being built, 7 million tonnes, two mines. In the 15th Five-Year Plan, according to the plan of production capacity increase verification method, we want to increase our capacity.
We also want to phase out the old and lagging behind mines, and we actually did a sort out. We expect that by 2030, the total production rate would be 1.8 trillion tonnes, 180 million tonnes.
I want to add something. That is just our plan. Of course, there will be some uncertainties involved. This is just piece of information for your reference. Mr. Shi, can you answer about the chemical?
Thank you. For chemical, according to the 15th Five-Year Plan, we expect the production increase to be around 4 million tonnes with the existing 6 million tonnes. At the end of the 15th Five-Year Plan, we will reach the capacity of 10 million tonnes. Basically, that's the situation. Thank you.
Thank you for the answer. Next question.
As the end of the year is coming, the long-term thermal coal or power coal contract will be negotiated. We say that we have a 75% of the signing rate and 90% of the fulfillment rate. How is that progress going? Will you more timely and more transparently release the price changes and the production arrangement and the price changes for the long-term price and the spot price?
Marketing and sales office. Mr. Li, please.
Thank you for the question. Starting from the end of October, basically the coal power plants are initiating the long-term contract negotiation. For our company, we also would adhere to that cadence and do the work. Internally for our own resource and logistics resources, we will try to orchestrate better. We would also look at the national policy, and we will study the market situation in 2027.
Accordingly, we will make some marketing and sales decisions. We will start the implementation on the booking of the production of 2027. Things are actually earlier than the previous years. According to the requirements, and also as you mentioned, the 75% and 90%, we may see some minor adjustments on that. Recently, NDRC just released the mid-term, long-term contract productive methods, laying down some of the details, and also for the fluctuation in 2026. There is the deviation of the long-term contract and the spot price. There had been some impact by the international situation on the market. It seems that our national government will issue some policies.
For China Coal Energy, first we need to do the work early, and we need to further make our work more granular. We would need to refer to the national policy. We don't foresee major changes. For the actual numbers and the price structure changes, of course, we will use various channels to communicate and release the information. If you are interested, please keep in touch. Thank you.
I want to add one thing about the information disclosure. For the production and sales plan, in our annual report, we actually disclose that information. We disclose the annual production target for the main product, and for every month, we periodically disclose the completion rate. For the sales and production numbers we release every month. For the completion, of course, we would have the in-detail report every quarter.
If you have any questions, of course, you can reach out to our IR department, and of course, we welcome your question at any time. Every month we have the monthly IR communication mechanism, so you can just communicate with our IR to get to know the monthly situation. Thank you.
Thank you for the answer. Next question. How does the company balance the stability of long-term contract and the flexible actual return in the spot market? In the winter season, how do you organize the approach? Thank you.
Every year, China Coal Energy would refer to NDRC's requirements as well as our own resource and make serious efforts in arranging the long-term contracts, the whereabouts, and also manage the price structures.
For the long-term contracts in this year, you see that there had been some fluctuation, and also we had run into difficulty in production. As a central enterprise, this is our obligation. Of course, the long-term contracts would predate other business arrangements, so in terms of the fulfillment of the long-term contract, we had always been stable. From January to September, our fulfillment rate had always been higher than 90%, as requested by NDRC. For the winter peak time, of course, every year, the demand in winter is higher, and also in this winter, we may run into tighter supply and also difficult logistics. But of course, we would tackle this head-on and try to guarantee our long-term contract because this year we have made some preparations in the long-term contract negotiation and in term of the fulfillment. So we won't foresee a lot of adjustments.
Thank you.
Thank you for the answer. Next question. For PO, polyolefin, we've seen rise on both volume and price. The volume went up by 16.7%, and the price went up by 10.9%. The cost went down by a lot as well. I think behind the stage, it's because of the conflict in the Middle East that created the gap of price in coal and oil. If the oil price falls down, where is the safety margin on the coal chemical? How do we rely on the integrated or complex facility to maintain the stable cost? Also for Yulin PO, for the Liquid Sunshine, we also have seen some production arrangement in the future. In 2027, how much will they contribute to the margin and revenue in 2027?
[Xuzhou] from chemical, please.
First question for the international oil price increase or the potential falls and the impact on chemical, right? Currently speaking, the geopolitical tensions caused the oil price increase for chemical. With the rise, of course, proportionally, we have seen some price increases. For the coal chemical, it's of course good news. The overall margin is on the rise. You talked about the balance point or the safety margin. According to the previous years of oil price, basically $70 is like the balance point of oil and coal chemical. At $70, basically, they are very similar. In the future, if there are potential oil price drops, then we still need to increase the production volume to reduce the unit cost. Also we need to reduce the energy and material consumption to realize the control of our margin.
The second question about the 900,000 tonne coal to olefin. Right now, we have been doing some pre-commissioning testing. It seems that in November we can do a startup. The other is the local solar, the startup. I think for the chemical part, we can do some commissioning at the end of the year, and we can do some trial production. But for the new energy part, things may delay a little bit. For the full unit production, I think it will be in Q1 next year. You talked about the phase two of Yulin. After that is commissioned, what is the impact on the margin next year? I should say for Yulin phase two, especially for PO, along with Yulin phase one, I think they are very different in their attribute, in their product.
Of course we want to diversify and premiumize, and that is our guiding principle when we organize our production. Because in Yulin there is the HDPE and also the PP process, so they are different. In terms of high added value, I think it will be reflected. In Yulin phase one, I think after Yulin phase two is in production, I think it will definitely contribute to more margin.
Thank you for the answers. Since time is limited, we will have the last question. Please control it within one or two questions.
Hi. Good afternoon. My name is [Chen Chen]. Thank you for the opportunity. I have two small questions. First, for the thermal coal, how high is the heat value, calorific value? The second question is, in Q2 and Q3, for the commercial coal, the production was 31 million tonnes.
Because you want to guarantee a stable supply, right? In Q4, can we recover to the level of 34 million tonnes-35 million tonnes? We would only want to hear the guideline on that. Thank you.
Sorry, let me repeat the question because some of it was not that clear. First, you were talking about the calorific value of the thermal coal, and can we sustain that product structure, right? In other words, the relative high calorific value coal, will we maintain stable production on that, right?
Yes. Second question is about the Q4 commercial coal production. Can that recover to the previous level? Remain to like 35 million tonnes?
Okay. Yeah, 34 million tonnes-35 million tonnes.
Yeah. You're comparing against the history, right?
Okay. The two questions about product structure and the calorific value, and the second is about the production plan.
Liu Xiangping from coal, please.
Thank you for the question. To answer the first question, for the quality of coal in recent years, in 2026, our sold coal was like 4,900 kcal. Compared to the previous years, it was stable. We have different methods of improving the coal quality. For example, on the mining side, and also we reduce the mixture of dry and wet. Also we would look at the market and dynamically shift our structures of coal. For the future, whether this can be sustained. If you look at the annual plan and our future arrangement, first, of course, we want the quality to remain relatively stable. Also we want to look at the market situation and improve our quality. Basically that is, in a certain way, guaranteed.
Second, in terms of the following three months, the capacity and production arrangement according to the national and local policy on stabilizing supply. It stated that for every month, we can produce according to no more than one twelfth of the annual production capacity. That means in the following three months, we cannot do overproduction. Right now, especially in Shanxi, it is unlikely that we will see a big production release. Basically, we can maintain the level of full release of capacity. Thank you.
Let me add something. First, for the coal quality and also the structure. Just now, Mr. Liu answered. The other thing is that our structure would, of course, fit the market demand. We would determine the production according to the sales. Improving the quality of coal in a certain way will affect the total production.
If the market has higher demand on the low calorific value coals, we would also adjust accordingly to enlarge the low calorific value coal sales. The overall principle is to prioritize the efficiency of the company. Second, I think several questions are about the Q4 production. The overall principle is that we will try our best to make up for the gap. Affected by the policy, compared to the previous, we may have some gap, but we will try to finish our goal of making up for the gap. Of course, it is affected by policy. Thank you.
Thank you. Thank you, Mr. Jiang. Thank you, dear leaders. Very clear.
Thank you for the answer, and thank you, investors, for the communication. That is the end for the Q&A. Any summary by the leaders?
Thank you, dear analysts and investors.
If you have any follow-up questions, please continue to reach out to our IR. Thank you. That is all for today. Thank you.
Thank you for your participation. That is all for today. Goodbye.