The Whitehaven Coal Ltd (ASX: WHC) share price rocketed ahead in 2022, but could it still go higher in 2023?
Whitehaven shares soared 261% from $2.61 at market close on 31 December 2021 to $9.42 at market close on 30 December 2022. In today's trade, Whitehaven shares are up 2%.
So could the Whitehaven Coal share price still go higher?
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Could Whitehaven go even higher?
Whitehaven is a major coal producer and global exporter to markets including Japan, Korea and Taiwan.
The coal price is likely to weigh heavily on investors' minds this year, since it impacts the company's profit margin.
Analysts at UBS have recently predicted coal prices to "stay elevated" for longer. UBS said in January this year:
High calorific value coal (6,000 kilocalories per kilogram) is likely to remain in short supply, keeping prices of Newcastle thermal coal elevated in 2023. That said, some decline from record levels of above USD 400 per metric ton should still be expected.
A stronger price decline will probably only happen after 2025, following the next wave of additional LNG supply and additional power supply from renewables.
Meanwhile, a report from the Office of the Chief Economist is predicting thermal coal prices to rise from US$245 a tonne in FY22 to US$360 a tonne in FY23. However, metallurgical prices are predicted to drop from US$404 a tonne in FY22 to US$262 in FY23.
Production of coal from Whitehaven's mines may also weigh on the company's share price this year.
In November, Whitehaven "moderated" its guidance for FY23 coal production from its open-cut mines given possible weather impacts and labour constraints. The company is forecasting it will produce 19 to 20.4 Mt of coal in the 2023 financial year. Previously, Whitehaven had guided for 10 to 22 Mt of coal.
Whitehaven share price snapshot
The Whitehaven share price has exploded 202% in the last year. However, in the past month, it has slid 6%.
Whitehaven Coal has a market capitalisation of about $8 billion based on the current share price.
