The coal price soared ahead in 2022, taking ASX coal shares along for the ride. But will it keep lifting higher this year?
ASX shares directly impacted by changes in the coal price include Whitehaven Coal Ltd (ASX: WHC), New Hope Corporation Ltd (ASX: NHC) and Yancoal Australia Ltd (ASX: YAL).
All three fell in today's trade, with Yancoal shares dropping 3.33%, shares in Whitehaven down 1.36%, and New Hope shares sliding 3.58% at the close of trade.
Zooming out for a look at the bigger picture, however, trading economics data shows that coal prices have soared 85% in the last year.
Let's check the outlook for the coal price this year.
Image source: Getty Images
Could the coal price go higher?
The outlook for coal prices appears to be mixed for 2023. However, long term, analysts anticipate the commodity will fall.
The Australian Government's Office of the Chief Economist said thermal coal prices were expected to rise in 2023.
According to a report in December, prices for thermal coal were forecast to rise from US$245 a tonne in FY22 to US$360 a tonne in FY23. However, in FY24, the government predicted thermal coal prices would slide to US$239 a tonne.
Meanwhile, metallurgical coal is tipped to drop from US$404 a tonne in FY22 to US$262 in FY23 and US$238 in FY24.
Coal exports are also expected to rise in the 2023 financial year. Commenting on the outlook for thermal coal, the report stated:
Thermal coal exports should exceed $75 billion this financial year, up from $46 billion in 2021–22. After 2023–24, earnings from these commodities are likely to fall back towards pre-COVID-19 levels, as gains in world supply bring down prices.
Meanwhile, an analyst quoted by Bloomberg recently tipped coal prices to lift in the new year before retreating as Europe and the United States head into summer. Saxo Capital Markets strategist Jessica Amir, cited by the publication, said:
Demand for coal usually peaks in January, so some of these shareholder returns could grow into the new year as the energy crisis continues.
She added coal prices might "lose heat before the mid-year, as Europe and US head into summer and thus demand for coal will cool".
As my Foolish colleague Tristan reported recently, Whitehaven and New Hope could pay big dividends in FY23. New Hope may pay a dividend yield of 40% in FY23, while Whitehaven may pay 16%
Share price snapshot
The Whitehaven share price has exploded 203% in the last year.
The New Hope share price has climbed 157% in the last 52 weeks.
Yancoal shares have also surged, lifting 110% in the past year.
