One of the biggest movers in morning trade has been the Whitehaven Coal Ltd (ASX: WHC) share price. It climbed almost 7% to $2.97 despite there being no news out of the coal miner.
Today's gain now means the coal mining giant's share price has rallied over 600% in the last 12 months.
Why did it rally today?
With Whitehaven due to announce its half-year results tomorrow, it would appear as though some investors are expecting a strong result.
Especially after Canadian coal miner Teck Resources posted a record profit result overnight according to Reuters. The strong demand for coal from steelmakers was the driving force behind the impressive result.
Another reason that Whitehaven's share price may have jumped higher today is news that Chinese regulators may curb production once again according to Bloomberg.
Following a sharp drop in spot prices in January, Chinese authorities are considering curbing output to the equivalent of 276 days of capacity next month.
Curbing production is likely to drive spot prices higher again, much to the delight of Whitehaven, Yancoal Australia Ltd (ASX: YAL), and BHP Billiton Limited (ASX: BHP).
But should you invest?
I wouldn't suggest investors snap up shares purely on speculation that China will curb production again.
China is extremely supportive of it miners so there's potentially a lot of truth in the news. But if the production cut doesn't occur, coal prices could continue to fall lower and put pressure on Whitehaven's share price.
So, for now I would suggest investors keep their powder dry and wait for further news out of China.
