ASX coal shares had a volatile year in FY24. The price of coal sank to lows of around US$115 per tonne in February, before rebounding sharply and peaking at around US$147/tonne by May.
They have since settled lower at US$132/tonne.
This hasn't stopped investors from lifting the bid on two Aussie coal giants on Wednesday.
Whitehaven Coal Ltd (ASX: WHC) and Yancoal Australia Ltd (ASX: YAL) both touched new 52-week highs around lunchtime on Wednesday.
Whitehaven shares hit highs of $8.95 shortly after midday, while Yancoal soared to $7.18 around the same time. Both have since cooled off slightly.
Here's a closer look at what may be behind the surge in these ASX coal shares.
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ASX coal shares hitting new highs
We can likely attribute today's rally to a combination of strong demand for coal, attractive dividends, and positive market sentiment.
Despite no market-sensitive news since May, Yancoal shares have been on an upward ascent. On 1 May, they were trading at $5.54 apiece and are now at $7.14 — a 28.3% increase.
According to my colleague Bernd, the recent forced halt in production at Anglo American's Grosvenor coking coal mine in Queensland due to an underground fire has also boosted investor interest.
Production is expected to be down for several months, which has created a bullish sentiment for other ASX coal shares like Yancoal.
Yancoal shares are up more than 50% over the past 12 months, outpacing the S&P/ASX 200 Index (ASX: XJO) by more than 43%.
Whitehaven Coal (ASX: WHC)
Whitehaven shares have also seen significant gains in recent weeks. The stock closed out trading in June at $7.65 per share before exploding to its yearly high on Wednesday.
It has whipsawed around 29% into the green over the past 12 months.
While the company has not released any market-sensitive news today, the rise also looks to be linked to strength in the basket of ASX coal shares, supported by strong global demand and favourable coal prices.
Global demand for coal is expected to grow, particularly from major importers like India and China. China plans to add 70 gigawatts of coal capacity this year, while India's coal imports increased by 25% in 2023.
This robust demand could support higher coal prices and benefit Australian coal producers, which would be positive for ASX coal shares.
The company's robust performance over the past year, along with attractive dividends, has made it a standout performer on the ASX.
Foolish takeaway
Both Whitehaven Coal and Yancoal have hit new 52-week highs as ASX coal shares catch a bid today. Even at the yearly highs, Yancoal trades at a price-to-earnings (P/E) ratio of 5, while Whitehaven has a P/E ratio of 5.50.
