<article><p class="lead">Indian energy firm Adani is on track to export coal from Australia this year, as the thermal and metallurgical coal trade between the two nations grows in importance in the absence of Chinese buying of Australian coal.</p><p>India took 45mn t of coal from Australia in January-July, up from 23mn t and 29mn t in the same period in 2020 and 2019 respectively, according to data from the Australian bureau of statistics (ABS). Adani's opening of its 10mn t/yr Carmichael thermal coal project in the Galilee basin in northwest Queensland and the promise of exports through Abbot Point port in December could build on this growth coal trade in 2022 and beyond. </p><p>Australia and India are working more closely on a diplomatic level, both through the Quadrilateral Security Dialogue (Quad) grouping, which also includes the USA and Japan, and through bilateral discussions. The first joint working group (JWG) meeting on coal and mines between India and Australia was held over video link last week ahead of next month's India-Australia Energy Dialogue. </p><p>India is seen as a key market for some of Australia's lower grade coals, which have been setting new records for discounts to premium products over the past few months, taking over from China as a major buyer. India's appetite for lower grade coal can be seen in the Carmichael project, which will produce thermal coal with a calorific value of around NAR 4,950 kcal/kg, rather than the standard 5,500-6,000 kcal/kg in Australia's Hunter valley.</p><p>The rise in Australian coal export prices from May saw some cooling in Indian appetite for Australian coal in June-July and it will be clear if that continued in August when the ABS releases that data on 5 October. But Australian coal is still trading at a significant discount to coal that is entering China, making it a comparatively lower cost option for India buyers.</p><p><i>Argus</i> last assessed high-grade Australian thermal coal at $182.55/t fob Newcastle for NAR 6,000 kcal/kg on 24 September, up from $151.90/t on 30 July and a low of $46.18/t on 4 September 2020. It assessed lower-grade coal at $108.25/t fob Newcastle for NAR 5,500 kcal/kg on 24 September, up from $92.93/t on 31 July and $35.04/t on 4 September 2020.</p><p><i>Argus </i>last assessed the premium hard low-volatile coking coal price at $407.65/t fob Australia on 24 September, up from $109.25/t on 10 May. </p><p><a href="https://direct.argusmedia.com/newsandanalysis/article/2141236">The development of Carmichael and its associated railway</a> could pave the way for more developers to resume their projects, which were put on hold when coal prices fell to below $60/t fob Newcastle for 6,000 kcal/kg NAR coal. These developers include Indian infrastructure firm GVK, US investment group AMCI, Australia's Hancock Prospecting, Australian firm Waratah Coal and China's Meijin.</p><p class="bylines">By Jo Clarke</p><p><div class="picture"><div><span class="pic_title">Metallurgical coal prices</span> <span class="units">$/t</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2021/09/27/metallurgicalcoalprices27092021044221.jpg"></div><p><div class="picture"><div><span class="pic_title">Thermal coal prices</span> <span class="units">$/t</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2021/09/27/thermalcoalprices27092021044148.jpg"></div><p><div class="picture"><div><span class="pic_title">Australian coal exports to India</span> <span class="units">kt</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2021/09/27/australiancoalexportstoindia27092021044108.jpg"></div></article>
