The Whitehaven Coal Ltd (ASX: WHC) share price is soaring this afternoon as it rebounds from Monday's slump.
Whitehaven shares are currently up 7.71% to $8.52 after losing 14% in yesterday's trading session.
It's also proving a good day for other ASX coal shares. New Hope Corporation Limited (ASX: NHC) shares are gaining 6.02%, Coronado Global Resources Inc (ASX: CRN) is up 3.36%, while the Yancoal Australia Ltd (ASX: YAL) share price is rising 1.67%.
On a broader level, the S&P/ASX 200 Energy Index (ASX: XEJ) is currently climbing 1.98%.
Coal futures are also up 0.64% and are currently trading for US$438 per tonne, according to Trading Economics.
This morning the Fool published bullish comments from a broker about the outlook for coal shares. Let's cover the highlights.
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What did the broker say?
Datt Capital principal Emanuel Datt is particularly bullish on thermal coal, which is consumed to create steam for electricity. Thermal coal is distinguished from metallurgical coal, with the latter used for carbon to create steel.
Datt gave his thoughts on why coal shares retain their importance on the world stage:
Effectively, the thesis behind thermal coal standard is a critical and cheap energy source in a world today that is highly energy constrained after the Russian-Ukraine war and knock-on sanctions. With our positions, we have an earnest on the quality of the product but also the jurisdiction and the location of the production assets itself.
Thermal coal also has the benefit, or what we think will be the benefit of, pretty likely to be higher energy prices throughout the winter months in the northern hemisphere. But also, we will benefit from US dollar exposure and thermal coal has recently had almost one-to-one correlation with US dollar strength of late.
Datt went on to say that the long-term outlook for coal shares is uncertain due to the cyclical nature of commodities and forces of supply and demand.
Whitehaven share price snapshot
The Whitehaven share price is up 207% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 14% over the same period
Whitehaven Coal has a market capitalisation is $7.56 billion.
