The Whitehaven Coal Ltd (ASX: WHC) share price exploded in 2022, but what could be ahead?
Whitehaven Coal shares soared 261% in 2022 to $9.42. For perspective, the S&P/ASX 200 Index (ASX: XJO) has slid 6% in a year.
Let's take a look at the outlook for Whitehaven Coal in 2023.
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What's ahead for the coal price?
Whitehaven is a coal producer that operates four mines in New South Wales and is developing two assets in Queensland.
Whitehaven exports coal globally to Japan, Korea and Taiwan. The price of coal is likely to weigh on the Whitehaven coal price again in 2023.
A recent report from the Office of the Chief Economist is predicting thermal coal prices to lift from US$245 a tonne in FY22 to US$360 a tonne in FY23 before declining to US$239 a tonne in FY24.
The report said:
Thermal coal earnings in 2022–23 and 2023–24 have been revised up by $13 and $17 billion, respectively. Weather problems in major producing nations have hurt supply and helped keep the price of thermal coal (especially high quality grades) very high.
Meanwhile, the report tips metallurgical coal prices to fall from US$404 a tonne in FY22 to US$262 a tonne in FY23 and US$238 a tonne in FY24. Commenting on the metallurgical coal price, the report said:
Metallurgical coal prices have lifted since early August, but remain well below levels reached in the March-June 2022 period.
Meanwhile, Saxo Capital Markets strategist Jessica Amir is predicting shareholder returns for ASX coal companies to lift in the new year. She said in quotes cited by Bloomberg:
Demand for coal usually peaks in January, so some of these shareholder returns could grow into the new year as the energy crisis continues.
However, she predicted coal prices may "lose heat before the mid year, as Europe and US head into summer and thus demand for coal will cool."
Whitehaven coal achieved a record average coal price of $581 Australian dollars in the September quarter.
The company recently updated its guidance on coal production for FY23 from 20 to 22 Mt to 19 to 20.4 Mt.
Whitehaven Coal share price snapshot
The chart below shows Whitehaven Coal's share price performance in 2022.
Whitehaven Coal has a market capitalisation of nearly $8.5 billion based on today's closing price.
