The Whitehaven Coal Ltd (ASX: WHC) share price is having a great run on the ASX.
Shortly after open today, the Whitehaven share price is $3.26, which is 16.4% higher than it was 8 trading days ago.
The boost is even more impressive as it’s come about despite no price-sensitive news being released by the company.
Let’s take a look at what might be driving the coal miner’s share price higher.
Price of coal hits record highs
Whitehaven’s annual report was released to the market on Friday, 24 September.
Within it, the company’s directors noted global coal supplies are running short as demand from China is increasing.
In fact, that excess demand has seen the price of coal soaring recently.
According to data from Business Insider, a tonne of coal costs US$210 right now. That’s 40% more than this time last month. It’s also coal’s highest price ever.
The value of coal has been increasing due to demand from China outstripping supply. In fact, the nation is experiencing a shortage of the commodity.
China’s winter is approaching fast, and it needs electricity to heat households and keep its industries up and running.
In 2019, 57.7% of China’s electricity was created by burning coal.
According to reporting by Reuters, several Chinese provinces are currently rationing electricity in peak hours. Some manufacturers have had to slash their output due to the power shortage.
But markets can be cruel. The unfortunate news from China is good news for the Whitehaven share price.
As the ASX’s only pure-play coal producer, Whitehaven is seemingly reaping the rewards of record-high coal prices.
Whitehaven Coal share price snapshot
Recent gains to the Whitehaven share price have added to the stock’s strong performance on the ASX this year.
Right now, the company’s stock is trading for 96% more than it was at the start of the year. It has also gained 210% since this time last year.