S&P/ASX 200 Index (ASX: XJO) coal shares have soared ahead in the year to date, but could they go even higher?
Coal explorers on the ASX 200 include New Hope Corporation Limited (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).
Let's take a look at the outlook for ASX 200 coal shares.
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Coal prices to rise
On Tuesday, New Hope shares soared after the company reported a 1,138.8% lift in profit in FY22. The major driver for this result, as my Foolish colleague James noted on the day, was higher coal prices.
In Tuesday's report, New Hope said coal pricing is "at record levels". The company noted demand is outstripping supply and a "limited supply response is expected". New Hope said:
With global energy demand to remain flat to 2030, stronger longerterm pricing is expected to remain considering constrained supply.
New Hope noted there is a "robust market demand" for high energy and lower emission thermal coal, adding that the Russia and Ukraine conflict has "further tightened supply.
The company said even if global demand reduces, New Hope's operations "remain resilient. New Hope said:
The company is focused on remaining in the lowest quartiles of the global cost curve, maximising shareholder returns.
Whitehaven Coal also highlighted the "record" thermal coal prices in its FY22 results presentation in late August. Whitehaven said the "strong demand" and tight supply" are underpinning these price rises.
Events over the past two years have caused a shift in global trade flows and tightened the supply of all coal products, leading to strong demand and record high prices – especially for
high-CV coal.
The company reported a record $3.1 billion EBITDA and $2 billion net profit after tax (NPAT) in FY22.
Share price snapshot
ASX coal shares are having a stellar year. The Whitehaven Coal share price has exploded 243% year to date, while it has risen 214% in the past year.
Meanwhile, the New Hope share price has risen 176% in the year to date and 187% in the past year.
For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) has risen 40% in the past year and 35% in the year to date.
