Why did the Whitehaven Coal share price tumble 6% today?

We take a look at what may have impacted the company's share price today.

| More on:
Coal miners look resigned to the end of mining this resource

Image source: Getty Images

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 Whitehaven Coal share price closed more than 6% lower on Tuesday
  • It joined many other ASX coal shares in the red today 
  • The price of coal on global markets fell nearly 4% in a day

The Whitehaven Coal Ltd (ASX: WHC) share price had a rough first day of 2023 trading.

Whitehaven shares closed down 6.26% at $8.83 apiece. For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) finished 1.33% lower today.

Let's take a look at what might have been impacting the Whitehaven Coal share price today.

What's going on?

Whitehaven was not the only ASX coal share to decline today. New Hope Corporation Ltd (ASX: NHC) shares finished 8.49% lower, while Coronado Global Resources (ASX: CRN) shares closed 4.77% in the red. Yancoal Australia Ltd (ASX: YAL) shares also dropped 4.95%.

The coal price fell 3.6% in a day to US$389.60 a tonne, Trading Economics data shows.

Milder-than-expected weather in Europe could be weighing on the coal price. Seven European countries recorded their warmest January day on record on New Year's day, the Washington Post reported.

It comes as European nations, including Germany, have been turning to coal for power generation in 2023 amid the Russian invasion of Ukraine, Reuters reported.

The natural gas price also tumbled 7% overnight. Natural gas is also used to generate electricity.

Whitehaven operates four coal mines in New South Wales and is developing two assets in Queensland.

A federal Department of Industry report recently predicted thermal coal prices to fall from US$360 a tonne in FY22 to around US$200 a tonne in FY24.

The report from the office of the department's chief economist also predicts metallurgical coal prices to drop from US$377 a tonne in the 2022 financial year to US$230 a tonne in FY24.

Meanwhile, the team at Macquarie has put an outperform rating on the Whitehaven share price with a $12.50 price target, my Foolish colleague James reported today.

Share price snapshot

The Whitehaven Coal share price has soared 238% in the last year.

Whitehaven has a market capitalisation of about $7.9 billion based on the latest share price.

Motley Fool contributor Monica O'Shea 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 Share Fallers

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why 29Metals, Brainchip, Platinum, and Premier Investments shares are falling today

These ASX shares are having a tough time on hump day.

Read more »

Man with his head in his head because of falling share price.
Share Fallers

Why 29Metals, Atlas Arteria, IDP Education, and Mineral Resources shares are falling

These ASX shares are having a tough time on Tuesday. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ALS, EOS, NRW, and Patriot Battery Metals are dropping today

These ASX shares are starting the week in the red.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why AGL, Brickworks, IGO, and New Hope shares are dropping today

These ASX shares are having a poor session. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Amcor, Arafura, Brainchip, and South32 shares are tumbling today

These ASX shares are having a tough time on hump day. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Aussie Broadband, Liontown, Metals Acquisition, and Seek shares are falling

These ASX shares are having a poor session. But why?

Read more »