The Whitehaven Coal Ltd (ASX: WHC) share price is up 0.3% in early afternoon trade, having earlier been up more than 2.3%.
This comes as the broader S&P/ASX 200 Index (ASX: XJO) is down 0.9%, with investor fears on inflation and an economic slowdown for China again taking hold.
But the ASX 200 energy share has been largely spared. Below we take a look at what's supporting the Whitehaven share price.
Coal prices are hitting records
Surging coal prices have certainly provided strong tailwinds for the Whitehaven share price.
Australia's high-quality thermal coal – the kind mostly used for power generation – has been a big beneficiary of global supply disruptions amid soaring energy demand.
Thermal coal selling out of Newcastle's port in New South Wales has now hit US$203.20 (AU$278.30) per tonne. That's a new record high for the benchmark price for coal shipped into energy hungry Asia.
China, in particular, is scrambling to secure enough coal to keep the lights on and the heaters cooking as northern winter begins to bite. Coal fired power supplies some 70% of China's energy needs.
According to Mining.com:
Earlier this week, Chinese Vice Premier Han Zheng ordered state-owned energy giants to secure fuel supplies for winter at any cost. China consumes and mines half the world's coal, and it's also the largest importer. The government told miners to keep digging even if they've exceeded their annual quota.
But the government's orders appear to have come too late to stop the surge in coal prices.
As Bloomberg reports, "China's coal production grew by 6% in the first eight months this year, but the power output from coal-fired generators surged 14% in the same period, leading to a decline in inventories."
High energy costs are one of the factors driving investors' inflation fears, even as they're helping support the Whitehaven share price.
Whitehaven share price snapshot
Whitehaven shareholders will have little to complain about over the past 12 months, with shares up a remarkable 212%. Over that same year the ASX 200 has gained 21%.
2021 continues to be a good year for the Whitehaven share price. It's up 104% year-to-date.
