ASX 200 coal shares have soared ahead in the year to date, but what's the outlook for the future?
ASX 200 coal shares include New Hope Corporation Limited (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).
Whitehaven shares have soared 320% year to date, while New Hope shares have lifted 207%.
ASX coal share prices are closely linked to the price of coal. Whitehaven Coal reported a record realised coal price of $325 per tonne in FY22. New Hope also noted coal prices are "at record levels" in its 2022 financial results presentation.
So let's take a look at the outlook for ASX coal shares.
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What's ahead for the coal price?
New Hope shares rose 1.18% today while Whitehaven Coal shares jumped 4.78%.
ANZ analysts are tipping that a boost in Chinese coal production could weigh on coal prices. However, European demand is expected to be strong.
In a research note on Friday, ANZ senior commodity strategist Daniel Hynes and commodity strategist Soni Kumari said:
Coal prices face upward pressure from strong European demand, though increasing domestic production in China could weigh on prices ahead of the peak heating demand season.
Strategists highlighted Europe's energy crisis "is likely to prompt power utilities to switch from gas to coal", which they said "could increase competition for seaborne coal. They added:
Chinese coal imports have slowed in recent months due to strong domestic production. There could be some relief as China and India import more Russian coal.
This week, a Federal Industry Department quarterly resources energy report had a mixed outlook on the coal price.
The report forecasts thermal coal to rise from US$245 a tonne in FY22 to US$309 a tonne in FY23.
However, the metallurgical coal price is expected to drop from US$404 per tonne in FY22 to US$283 per tonne in FY23.
Thermal coal export value is predicted to lift nearly 35% from $46 billion in FY22 to $62 billion in FY23. However, the metallurgical coal export value is forecast to decrease 12% from $66 billion to $58 billion. The report said:
Australian thermal coal prices remain extremely high, as European nations look to build stockpiles ahead of the Northern Hemisphere winter.
The exclusion of large quantities of Russian coal from markets in the Northern Hemisphere could inflate coal prices for years to come.
Share price snapshot
Whitehaven Coal shares have soared 228% in the past year, while New Hope shares have lifted 167%.
For perspective, the S&P/ASX 200 Index (ASX: XJO) has shed 7% in the past year.
