Insights

Here’s why the New Hope (ASX:NHC) share price is climbing 7% today

Unlike iron ore or copper, coal prices are booming to all-time highs.
The post Here’s why the New Hope (ASX:NHC) share price is climbing 7% today appeared first on The Motley Fool Australia. –

The New Hope Corporation Ltd (ASX: NHC) share price is rallying on Wednesday, up 7.44% to $2.31.

Sell off? What sell off?

China’s Evergrande crisis rattled the global equity markets on Monday, dragging the S&P/ASX 200 Index (ASX: XJO) 2.10% lower to a 3 month low of 7,248.2.

New Hope also took the brunt of the selling, sliding 8.04% to $2.06.

Encouragingly, its shares have displayed a V-shaped recovery, surging 12.1% since its $2.06 close on Monday.

What’s driving the New Hope share price?

Coal prices have boomed to all-time highs of US$179 per metric tonne, supported by surging demand for electricity and power across China and India.

In the case of China, policymakers have been tightening environmental controls for the coal industry since March, according to S&P Global. The strict monitoring of its domestic coal operations has slowed down output capacity, driving a sharp decline in supply.

In addition, officials in China’s Shandong province are planning to shut down 27 coal mines with under 300,000 metric tonnes a year of output capacity between 2021 to 2022, further squeezing domestic supply.

In a separate report, S&P Global cited the tightening supply of coal was taking place on a global level, resulting in “lower spot transaction volumes, pushing the coking coal market higher”.

“Ex-China spot demand for seaborne coking coal increased by about 280% on the year in [the] first half of 2021.”

Another factor that could be driving the New Hope share price is the release of its FY21 full-year results on Monday.

The company delivered a major turnaround with a net profit after tax of $79 million compared to a $157 million loss in FY20.

New Hope CEO Reinhold Schmidt was pleased with the company’s performance and outlook for coal.

The Newcastle 6000 Index hit 10 year highs by financial year end, rapidly recovering from the depressed market conditions experienced at the start of the financial year.

The Company achieved an average realised price of $101.36/t in 2021. At 31 July 2021, the Newcastle 6000 Index had almost doubled from January 2021 levels, to USD$150 per tonne, and has continued to trend upwards.

The post Here’s why the New Hope (ASX:NHC) share price is climbing 7% today appeared first on The Motley Fool Australia.

Should you invest $1,000 in New Hope right now?

Before you consider New Hope, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and New Hope wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Atlas Arteria, Baby Bunting, De Grey Mining, & New Hope are pushing higher

Which ASX 300 shares are the biggest winners and losers on Tuesday?

ASX 200 (ASX:XJO) midday update: APA makes AusNet bid, New Hope results impress

New Hope (ASX:NHC) share price jumps on $337m profit turnaround
ASX 200 energy shares in firing line of United Nations’ climate action

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!