Friday has been a great day for the Yancoal share price. Here’s why.
The post Yancoal (ASX:YAL) share price surges 11% to a new 52-week high appeared first on The Motley Fool Australia. –
Shares in Yancoal Australia Ltd (ASX: YAL) surged to a 52-week high today despite no news from the company.
The Yancoal share price hit $3.08 in intraday trade on Friday – the highest price it has been in the last 12 months.
That also represents a return to its trading level before March 2020 when the COVID-19 pandemic saw the price of coal tumble as the world came to a halt (or at least stayed home) and China banned Australian coal imports.
In fact, the last time shares in the coal producer reached $3.08 was way back in November 2019.
At the time of writing, the Yancoal share price has retreated slightly from its 52-week high. It is currently trading $2.95, still 9.67% higher than its previous closing price.
Meanwhile, the broader market is experiencing a major sell-off, making today’s Yancoal surge even more impressive.
Let’s take a look at what might be driving the Yancoal share price higher today.
Yancoal share price takes off on Friday
The Yancoal share price has taken off today despite the company’s silence.
At the same time, the spot price of coal is surging higher, as it has been for the past 11 or so days.
The spot price of a tonne of coal is currently at a record high of US$218.25, according to data from Business Insider. That’s 39% higher than it was this time last month.
It appears the price of the commodity is being pushed higher by increasing demand from China.
China generates more than half of its electricity by burning coal. Right now it needs more of the black rock than it has access to.
According to reporting by the BBC, China is rationing electricity and experiencing power outages amid the shortage and increasing prices.
Of course, the bad news for those living in China and India has been good news for ASX-listed coal producers.
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Motley Fool contributor Brooke Cooper 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.