The Whitehaven Coal Ltd (ASX: WHC) share price is storming higher today, despite no news out of the coal miner. Shares in the ASX mid cap are currently trading 10.36% above last night’s close.
Impressively, in intraday trade Whitehaven shares reached a 3-month high of $1.58 before settling to their current level of $1.54. These gains come on the back of a challenging few months for the Whitehaven share price.
What’s driving its resurgence?
The NSW coal miner was recently added to the list of the 10 most shorted shares on the ASX. Whitehaven was a new entry in the top 10 with short interest of 7.7%. Traders were shorting the coal miner amid reports that China was going to ban purchases of Australian coal. However as these rumours have abated, the company has seen a dramatic change in fortunes.
Additionally, a recent report by Wood Mackenzie suggests that coal imports may actually increase in December in China. According to the report, thermal coal imports will grow from 9.5Mt to 20Mt, which is an increase of 111%. Mining accidents in Shanxi, Shaanxi and Inner Mongolia have prevented output from increasing and imports will have to fill the void.
Furthermore, the recent development of vaccines has continued to improve sentiment about the recovery from COVID-19, which has helped to lift the broader market.
What now for the Whitehaven share price?
The uptick in share price will be a relief for shareholders, who have witnessed a decline in share price of almost 50% this year.
However, the Whitehaven share price will remain heavily reliant on China’s demand.
Also noteworthy is the fact that insider Fritz Kundrun recently sold a substantial portion of shares. The sale of the 12.7 million shares was completed below the current market price at $1.17, meaning Kundran pocketed just under $15 million. However, despite this being the largest insider sale this year, it was not a substantial part of Mr Kundrun’s holding in the company.
The Whitehaven share price is trading 10.36% higher at the time of writing.