Why are ASX 200 coal shares burning brighter on Wednesday?

ASX coal shares are smashing the market today… again.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • The ASX 200 has recorded some healthy gains today
  • But ASX 200 coal shares are leaving the index in the dirt
  • Why are coal shares lighting up the ASX sky today?

After a shaky start this morning, the S&P/ASX 200 Index (ASX: XJO) is once again powering higher so far this Wednesday. At the time of writing, the ASX 200 has gained a healthy 0.32%, putting the index above 7,270 points. But ASX 200 coal shares are burning even brighter than that.

Take the Whitehaven Coal Ltd (ASX: WHC) share price. Whitehaven shares have rocketed higher so far this Wednesday. This ASX 200 coal share has gained an impressive 8.75% at the time of writing, up to $10.07 a share.

The gains are extending to New Hope Corporation Limited (ASX: NHC) shares too. New Hope is up a still-impressive 6.01% at present at $5.905 a share.

So what's going on in this sector today that has seen such market-smashing gains?

A little girl with red hair runs excitedly with a rocket strapped to her back, trying to launch.

Image source: Getty Images

Why are ASX 200 coal shares lighting up the share market today?

Well, it could be a few things. Firstly, coal prices themselves. Earlier this month, coal was asking for around US$325 per tonne. Last week, it was commanding a price of US$355. As of yesterday, it was up to US$387.40.

Such dramatic price rises for Whitehaven and New Hope's primary breadwinner were always going to whip up investors' excitement.

So that's one very plausible reason why coal shares are shooting the lights out today. But we've also seen some love from ASX brokers recently too.

As my Fool colleague James reported today, ASX broker Morgans has recently come out with an add rating on Whitehaven shares. That came with a 12-month share price target of $11.20. That would imply a further upside from today's prices of just over 11%.

Here's what the broker had to say on its add rating:

For investors, we see strong potential for a prolonged energy market dislocation where supply security commands a higher premium for longer. WHC is trading on a +30% free cash flow yield, with clear upside earnings/valuation risk, supporting further outsized shareholder returns over time.

So it's perhaps no wonder that investors are fighting over themselves to get a hold of ASX 200 coal shares like Whitehaven and New Hope today.

Motley Fool contributor Sebastian Bowen 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.

More on Resources Shares

Robot humanoid using artificial intelligence on a laptop.
Resources Shares

Buying BHP shares? Here's how AI is boosting the mining giant's revenue

BHP is embracing AI technologies to streamline its operations. But how?

Read more »

A woman is very excited about something she's just seen on her computer, clenching her fists and smiling broadly.
Resources Shares

Fortescue shares ease, but this major update could keep momentum building

Fortescue slips despite its Pilbara renewable rollout moving ahead.

Read more »

A mining worker clenches his fists celebrating success at sunset in the mine.
Resources Shares

Monadelphous wins $145m of new and renewed resources sector contracts

Monadelphous reported $145 million in new and extended contracts across key resource clients Rio Tinto, BHP, and Queensland Alumina.

Read more »

Two cheerful miners shake hands while wearing hi-vis and hard hats celebrating the commencement of a HAstings Technology Metals mine and the impact on its share price
Resources Shares

Fortescue accelerates world's first large-scale industrial green energy grid

Fortescue is speeding up its renewable-powered green grid rollout, targeting major cost savings and earlier fossil fuel elimination.

Read more »

A group of people gathered around a laptop computer with various expressions of interest, concern and surprise on their faces as they review the payouts from ASX dividend stocks. All are wearing glasses.
Resources Shares

Buy, hold, or sell? South32, Capstone Copper, and BHP shares

Let's see what the experts think.

Read more »

Red buy button on an Apple keyboard with a finger on it.
Broker Notes

3 reasons to buy Capstone Copper shares today

A leading analyst expects more outperformance from Capstone Copper’s surging shares. But why?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Resources Shares

Up 188% in a year, why is this ASX All Ords mining stock surging again today?

Investors are piling into this fast-rising ASX mining stock again on Thursday. But why?

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Resources Shares

Sandfire Resources posts Q3 FY26 operations highlights and maintains guidance

Sandfire Resources has reported steady Q3 FY26 copper equivalent production, maintained guidance, and strengthened its net cash position.

Read more »