The Whitehaven Coal Ltd (ASX: WHC) share price is rising today despite no recent market announcements. At the time of writing, shares in the coal miner are trading for $2.00 – up 2.56%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.42% higher.
Let's take a closer look at what might be driving today's price jump.
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Coal prices are flying
Coal is currently trading on the commodity market for about US$132 a tonne – its highest price in more than 10 years. A 2.7% jump in the fossil fuel's price overnight saw the black rock reach this record.
Coal has been trending upwards for at least a year. Its market price is 150% higher than compared to this time last year, 63% greater than the beginning of 2021, and 21% above its price last month.
The website Trading Economics puts this sharp price rise down to constricting supply and surging demand, especially out of Asia. Trading Economics is also forecasting the price of coal to increase by almost 20% in 12 months' time.
This could be one explanation for the growing Whitehaven share price.
Brokers are digging the Whitehaven share price
As Motley Fool Australia reported, Whitehaven shares appreciated by almost 24% over the month of June. A series of positive broker notes related to the company and its chief product, coal, seem to have piqued the interest of investors.
For example, Ord Minnett upgraded Whitehaven shares to a buy rating with a target price of $3.00 – 50% higher than its current share price.
Whitehaven share price snapshot
Over the past 12 months, the Whitehaven share price has increased by 33%. While it has been good news for investors over the past year, for longer-term shareholders, it has not been as bright.
Two years ago, shares were trading for $3.65 and 3 years ago Whitehaven shares were valued at $5.87. In percentage terms, this is respectively a 45% and a 66% fall.
The shift in global demand from coal-fired power to renewable energy probably fuelled this decline. Whitehaven Coal has a market capitalisation of around $2 billion.
