Whitehaven share price leaps 8% amid ASX 200 coal rally

The Whitehaven Coal Ltd (ASX: WHC) share price is soaring this afternoon as it rebounds from Monday’s slump.

Whitehaven shares are currently up 7.71% to $8.52 after losing 14% in yesterday’s trading session.

It’s also proving a good day for other ASX coal shares. New Hope Corporation Limited (ASX: NHC) shares are gaining 6.02%, Coronado Global Resources Inc (ASX: CRN) is up 3.36%, while the Yancoal Australia Ltd (ASX: YAL) share price is rising 1.67%.

On a broader level, the S&P/ASX 200 Energy Index (ASX: XEJ) is currently climbing 1.98%.

Coal futures are also up 0.64% and are currently trading for US$438 per tonne, according to Trading Economics.

This morning the Fool published bullish comments from a broker about the outlook for coal shares. Let’s cover the highlights.

What did the broker say?

Datt Capital principal Emanuel Datt is particularly bullish on thermal coal, which is consumed to create steam for electricity. Thermal coal is distinguished from metallurgical coal, with the latter used for carbon to create steel.

Datt gave his thoughts on why coal shares retain their importance on the world stage:

Effectively, the thesis behind thermal coal standard is a critical and cheap energy source in a world today that is highly energy constrained after the Russian-Ukraine war and knock-on sanctions. With our positions, we have an earnest on the quality of the product but also the jurisdiction and the location of the production assets itself.

Thermal coal also has the benefit, or what we think will be the benefit of, pretty likely to be higher energy prices throughout the winter months in the northern hemisphere. But also, we will benefit from US dollar exposure and thermal coal has recently had almost one-to-one correlation with US dollar strength of late.

Datt went on to say that the long-term outlook for coal shares is uncertain due to the cyclical nature of commodities and forces of supply and demand.

Whitehaven share price snapshot

The Whitehaven share price is up 207% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 14% over the same period

Whitehaven Coal has a market capitalisation is $7.56 billion.

The post Whitehaven share price leaps 8% amid ASX 200 coal rally appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 coal shares smashing it out of the park on Tuesday?
• ‘Largest exposure’: Why this expert is still bullish on red-hot ASX coal shares
• Why is the Whitehaven share price wilting 10% on Monday?
• Whitehaven Coal shares are on fire, but could there be a looming risk?
• Why Apollo Tourism, OZ Minerals, SSR Mining, and Whitehaven Coal shares are rising

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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