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Top News - Oil
China oil imports rebound in April, but weak fuel
demand weighs on refiners
China's crude oil imports grew nearly 7% in April from the
same month a year earlier, its first rise in three months,
although weakening fuel demand due to COVID-19
lockdowns has dampened throughput at Chinese
refineries.
The world's top crude oil buyer imported 43.03 million
tonnes last month, data from the General Administration
of Customs showed on Monday, equivalent to 10.5 million
barrels per day (bpd).
That compares with 9.82 million bpd in April 2021 and
10.06 million bpd in March.
Imports for January-April fell 4.8% versus the same period
last year to 170.89 million tonnes, or about 10.4 million
bpd.
Refinery throughput last month is estimated to have fallen
about 6%. A decline of that size has not been seen since
the early days of the COVID-19 pandemic.
Top refiner Sinopec Corp has said that since the second
half of March it has lowered operational rates to about
85% of capacity versus 92.6% earlier in the year, after
inventories rose amid COVID-19 curbs.
Refined oil product exports were at 3.82 million tonnes for
April, down 44% from the same month last year and
versus 4.07 million tonnes in March.
The exports, however, were still higher than expected as
refiners rushed to ease bulging stock levels amid
weakening domestic fuel demand. Companies were
earlier urged to consider suspending overseas sales in
April.
Fuel exports for the first four months plunged 38% on
year, in line with a government policy to curb excessive
refinery production at home.
Natural gas imports last month were 8.09 million tonnes,
down from 10.15 million tonnes in April last year. Imports
for the January-April period were down 8.9% on the year
to 35.87 million tonnes.
Refinitiv tanker tracking showed LNG imports last month
were 4.7 million tonnes versus March's 4.63 million
tonnes, sharply below the 6.73 million tonnes a year
earlier, as hefty spot prices continued to hinder buying.
Japan to take time phasing out Russian oil imports -
PM Kishida
Japan will take time to phase out Russian oil imports after
Top News - Agriculture
China April soybean imports rise after delayed cargo
arrivals
China's soybean imports in April climbed from a month
ago, helped by the arrival of cargoes previously delayed
by poor weather and slow harvests in South America,
customs data showed on Monday.
agreeing on a ban with other Group of Seven (G7)
nations to counter Moscow's invasion of Ukraine, Prime
Minister Fumio Kishida said on Monday.
The G7 nations committed to the move "in a timely and
orderly fashion" at an online meeting on Sunday to put
further pressure on President Vladimir Putin, although
members such as resource-poor Japan depend heavily
on Russian fuel.
"For a country heavily dependent on energy imports, it's a
very difficult decision. But G7 coordination is most
important at a time like now," Kishida told reporters,
repeating comments he made at the G7 meeting.
"As for the timing of the reduction or stoppage of
(Russian) oil imports, we will consider it while gauging the
actual situation," he said. "We will take our time to take
steps towards a phase-out." He did not elaborate.
There have been no ships loading Russian oil for Japan
since mid-April, according to Refinitiv data. About 1.9
million barrels were exported from Russia to Japan in
April, 33% down from the same month a year ago.
The Ukraine crisis has highlighted Japan's energy
dependence on Russia even as Tokyo has acted swiftly
and in tandem with the G7 in instituting sanctions.
The latest ban underlines a turn in Japan's policy. Japan
has said it would be difficult to immediately cut off
Russian oil imports, which accounted for about 33 million
barrels of Japan's overall oil imports, or 4%, for 2021.
It has already said it will ban Russian coal imports in
stages, leaving just liquefied natural gas (LNG). Japan is
in a particularly tough spot since it shut down the bulk of
its nuclear reactors following the 2011 Fukushima nuclear
disaster.
Russia was Japan's fifth-biggest supplier of crude oil and
LNG last year.
The Japanese government and companies own stakes in
oil and LNG projects in Russia, including two on Sakhalin
Island from which partners Exxon Mobil Corp and Shell
PLC have announced they will exit.
Still, Japan's biggest oil refiner, Eneos Holdings Inc, has
already stopped buying Russian crude, saying it would
get supplies from the Middle East.
On Friday, trading firm Marubeni Corp said it wanted to
withdraw from the Sakhalin-1 oil project but was keeping
its stake in line with government policy.
Kishida said on Monday there was no change to the
government's policy of keeping business interests in the
various Russian energy assets.
China, the world's top soybean importer, brought in 8.08
million tonnes of the oilseed in April, up 27% from 6.35
million tonnes in March, according to data from the Gen-
eral Administration of Customs. The figures were also up
from 7.45 million tonnes in the same month a year earlier.
In the first four months of the year, China imported 28.36
million tonnes of soybeans, down 0.8% from 28.59 million
tonnes in the previous year, according to the data.
Bad weather in Brazil delayed harvest and exports from
China's top soybean supplier, leading to lower arrivals in
the earlier months of the year.
Soymeal prices in China soared to record highs due to
tightening bean and meal supplies, coming down as more
cargoes arrived.
Chinese crushers bring in soybeans to make soymeal for
feed for the country's massive livestock sector and to pro-
duce cooking oil.
China is expected to need 7 million to 8 million tonnes of
soybeans each month through August, traders said.
While demand in May was mostly covered, Chinese
crushers were slow to buy soybeans for June-August
shipments as poor crush margins curbed their appetite,
Reuters reported in late April.
Importers have since booked more Brazilian soybean car-
goes for shipment during the coming months, traders
said.
Hog margins in China have recently recovered from rec-
ord lows hit in March thanks to rising pork prices, which in
turn supported soy crush margins.
Chart of the Day
2
French wheat crop condition eases slightly
The crop conditions of winter cereals in France eased
slightly in the last week of April, farm office
FranceAgriMer said on Friday, ahead of a hot and dry
spell that has raised concern among traders.
An estimated 89% of the French soft wheat crop was in
good or excellent condition in the week to May 2, down
from 91% the previous week but above a score of 79% a
year earlier.
A leading technical institute said on Thursday hot and dry
weather expected later this month in France, Europe's
biggest grain producer and exporter, would cause irre-
versible damage to grain crops.
For other cereals, crop ratings also slightly eased com-
pared with the previous week.
The good/excellent scores for winter barley lost one point
to 86% from 87% the previous week while 88% of the
spring barley crop was estimated in good/excellent condi-
tion, down from 91% the previous week, FranceAgriMer
said in a weekly cereal crop report.
For spring crops, some 84% of the expected grain maize
area had been planted by May 2, compared with 60%
progress the previous week and 87% seen a year ago.
Top News - Metals
China April copper imports fall 4% on year on weaker
demand -customs
China's copper imports in April fell 4% from the same
month a year earlier, customs data showed on Monday,
as lockdowns across the country hurt manufacturing
activity and consumption.
The world's top metals consumer brought in 465,330
tonnes of unwrought copper and products last month,
down from 484,890 tonnes in April 2021 and compared
with 504,009 tonnes in the previous month, according to
data from the General Administration of Customs.
China's factory activity contracted for a second straight
month in April, hitting the lowest level since February
2020 as widespread COVID-19 lockdowns halted
industrial production and disrupted supply chains.
A five-week lockdown in Shanghai has affected
automobile manufacturing, while movement restrictions
across the country are also hampering growth in the
property sector.
Copper arrivals in the first four months of the year stood
at 1.94 million tonnes, up 0.9% from same period a year
before.
April imports of copper concentrate, or partially processed
copper ore, totalled 1.88 million tonnes, according to the
data, falling from 1.92 million tonnes in April 2021.
The country exported 596,863 tonnes of unwrought
aluminium and products last month, the data also
showed, almost unchanged from the prior month.
China's exports of aluminium during January-April were
2.23 million tonnes, up 29% from a year earlier, according
to the data.
INSIGHT- Kicking the China habit: South Korea hunts
tungsten treasure
Blue tungsten winking from the walls of abandoned mine
shafts, in a town that's seen better days, could be a
catalyst for South Korea's bid to break China's dominance
of critical minerals and stake its claim to the raw materials
of the future.
The mine in Sangdong, 180 km southeast of Seoul, is
being brought back from the dead to extract the rare
metal that's found fresh value in the digital age in
technologies ranging from phones and chips to electric
vehicles and missiles.
"Why reopen it now after 30 years? Because it means
sovereignty over natural resources," said Lee Dong-seob,
vice president of mine owner Almonty Korea Tungsten
Corp.
"Resources have become weapons and strategic assets."
Sangdong is one of at least 30 critical mineral mines or
processing plants globally that have been launched or
reopened outside China over the last four years,
according to a Reuters review of projects announced by
governments and companies. These include projects
developing lithium in Australia, rare earths in the United
States and tungsten in Britain.
The scale of the plans illustrates the pressure felt by
countries across the world to secure supplies of critical
minerals regarded as essential for the green energy
transition, from lithium in EV batteries to magnesium in
3
laptops and neodymium found in wind turbines.
Overall demand for such rare minerals is expected to
increase four-fold by 2040, the International Energy
Agency said last year. For those used in electric vehicles
and battery storage, demand is projected to grow 30-fold,
it added.
Many countries view their minerals drive as a matter of
national security because China controls the mining,
processing or refining of many of these resources.
The Asian powerhouse is the largest supplier of critical
minerals to the United States and Europe, according to a
study by the China Geological Survey in 2019. Of the 35
minerals the United States has classified as critical, China
is the largest supplier of 13, including rare earth elements
essential for clean-energy technologies, the study found.
China is the largest source of 21 key minerals for the
European Union, such as antimony used in batteries, it
said.
"In the critical raw material restaurant, China is sitting
eating its dessert, and the rest of the world is in the taxi
reading the menu," said Julian Kettle, senior vice
president for metals and mining at consultancy Wood
MacKenzie.
'HAVE TO HAVE A PLAN B'
The stakes are particularly high for South Korea, home of
major chipmakers like Samsung Electronics. The country
is the world's largest consumer of tungsten per capita and
relies on China for 95% of its imports of the metal, which
is prized for its unrivalled strength and its resistance to
heat.
China controls over 80% of global tungsten supplies,
according to CRU Group, London-based commodity
analysts.
The mine at Sangdong, a once bustling town of 30,000
residents that's now home to just 1,000, holds one of the
world's largest tungsten deposits and could produce 10%
of global supply when it opens next year, according to its
owner.
Lewis Black, CEO of Almonty Korea's Canadian-based
parent Almonty Industries, told Reuters that it planned to
offer about half of the operation's processed output to the
domestic market in South Korea as an alternative to
Chinese supply.
"It's easy to buy from China and China is the largest
trading partner of South Korea but they know they're over
-dependent," Black said. "You have to have a plan B right
now."
Sangdong's tungsten, discovered in 1916 during the
Japanese colonial era, was once a backbone of the South
Korean economy, accounting for 70% of the country's
export earnings in the 1960s when it was largely used in
metal-cutting tools.
The mine was closed in 1994 due to cheaper supply of
the mineral from China, which made it commercially
unviable, but now Almonty is betting that demand, and
prices will continue to rise driven by the digital and green
revolutions as well as a growing desire by countries to
diversify their supply sources.
European prices of 88.5% minimum paratungstate - the
key raw material ingredient in tungsten products – are
trading around $346 per tonne, up more than 25% from a
year ago and close to their highest levels in five years,
according to pricing agency Asian Metal.
The Sangdong mine is being modernised, with vast
tunnels being dug underground, while work has also
started on a tungsten crushing and grinding plant.
"We should keep running this kind of mine so that new
technologies can be handed over to the next
generations," said Kang Dong-hoon, a manager in
Sangdong, where a "Pride of Korea" sign is displayed on
a wall of the mine office.
"We have been lost in the mining industry for 30 years. If
we lose this chance, then there will be no more."
Almonty Industries has signed a 15-year deal to sell
tungsten to Pennsylvania-based Global Tungsten &
Powders, a supplier to the U.S. military, which variously
uses the metal in artillery shell tips, rockets and satellite
antennae.
Yet there are no guarantees of long-term success for the
mining group, which is investing about $100 million in the
Sangdong project. Such ventures may still struggle to
compete with China and there are concerns among some
industry experts that developed countries will not follow
through on commitments to diversify supply chains for
critical minerals.
SUPPLY-CHAIN DIPLOMACY
Seoul set up an Economic Security Key Items Taskforce
after a supply crisis last November when Beijing tightened
exports of urea solution, which many South Korean diesel
4
vehicles are required by law to use to cut emissions.
Nearly 97% of South Korea's urea came from China at
the time and shortages prompted panic-buying at filling
stations across the country.
The Korean Mine Rehabilitation and Resources
Corporation (KOMIR), a government agency responsible
for national resource security, told Reuters it had
committed to subsidise about 37% of Sangdong's
tunnelling costs and would consider further support to
mitigate any potential environmental damage.
Incoming President Yoon Seok-yeol pledged in January
to reduce mineral dependence on "a certain country", and
last month announced a new resource strategy that will
allow the government to share stockpiling information with
the private sector.
South Korea is not alone.
The United States, European Union and Japan have all
launched or updated national critical mineral supply
strategies over the last two years, laying out broad plans
to invest in more diversified supply lines to reduce their
reliance on China.
Mineral supply chains have also become a feature of
diplomatic missions.
Last year, Canada and the European Union launched a
strategic partnership on raw materials to reduce
dependence on China, while South Korea recently signed
collaboration deals with Australia and Indonesia on
mineral supply chains.
"Supply-chain diplomacy will be prioritised by many
governments in the coming years as accessing critical
raw materials for the green and digital transition has
become a top priority," said Henning Gloystein, director of
energy and climate resources at the Eurasia Group
consultancy.
In November, China's top economic planner said it would
step up exploration of strategic mineral resources
including rare earths, tungsten and copper.
ENVIRONMENTAL OPPOSITION
Investment globally of $200 billion in additional mining
and smelter capacity is needed to meet critical mineral
supply demand by 2030, 10 times what is being
committed currently, Kettle said.
Yet projects have faced resistance from communities who
don't want a mine or smelter near their homes.
Top News - Carbon & Power
China April coal imports soar, driven by panic orders
in early March
China's coal imports surged 43% in April from March,
driven by panic buying over concerns of supply disrup-
tions stemming from Russia's invasion of Ukraine.
China shipped in 23.55 million tonnes of coal last month,
data from the General Administration of Customs showed
on Monday. That compares with 16.42 million tonnes in
March and 21.73 million tonnes in April 2021.
For the period of January-April, China brought in a total of
75.41 million tonnes of coal, down 16% from shipments in
the same period a year earlier.
Benchmark Newcastle thermal coal hit a record high of
$440 a tonne in early March, fuelled by fears of tight sup-
ply as Western countries vowed to impose sanctions on
Russia's financial system and energy products after it
invaded Ukraine. Moscow calls its actions in Ukraine a
"special operation".
As global coal prices stayed high while the Chinese cen-
tral government ordered miners to boost domestic output
and capped local prices, Chinese traders then shunned
expensive seaborne cargos in favour of domestic
sources. China aims to churn out a record 12.6 million
tonnes of coal each day and maintain coal prices under
term contracts at 570-770 yuan ($84.99-114.81) a tonne.
Meanwhile, the country's state planner in April urged 14
regions, including Guangdong, Guangxi and Zhejiang,
which largely rely on imported coal, to sign more term
contracts with the top mining hubs of Shanxi, Shaanxi
and Inner Mongolia for domestic supply.
Imports of the dirty fossil fuel could also be dented follow-
ing wide shutdowns of industrial plants across China due
to a flare-up of COVID-19 outbreaks.
Coal inventory at major power plants alongside Chinese
coastal provinces was about 30 million tonnes in late
April, comparing to an average level of about 25 million
tonnes in 2016-2021, data compiled by Wind showed.
China's finance ministry has cut import tariffs for all types
of coal to zero - from May 1, 2022, until March 31, 2023 -
aiming to ensure energy security amid soaring global
prices, but traders question whether it will drive up im-
ports.
'Bad boys' are back: India doubles down on coal as
heatwave worsens power crisis
India is planning to reopen more than 100 coal mines
5
In January, for example, pressure from environmentalists
prompted Serbia to revoke Rio Tinto's lithium exploration
licence while U.S. President Joe Biden's administration
cancelled two leases for Antofagasta's copper and nickel
mines in Minnesota.
In Sangdong, some residents are doubtful that the mine
will improve their lives.
"Many of us in this town didn’t believe the mine would
really come back," said Kim Kwang-gil, 75, who for
decades lived off the tungsten he panned from a stream
flowing down from the mine when it operated. "The mine
doesn't need as many people as before, because
everything is done by machines."
previously considered financially unsustainable, as a
heatwave-driven power crisis forces the world's third-
biggest greenhouse gas emitter to double down on the
fuel after months of low consumption.
State-run Coal India, which accounts for 80% of domestic
coal output, saw production fall for two straight years end-
ed March 2021 mainly due to a lack of demand during the
COVID-19 pandemic. India also pushed utilities to cut
imports of coal used for power generation to zero during
that period.
But a recovery from the pandemic followed by an unre-
lenting heatwave boosting air conditioning use, has re-
vived demand and the government is forcing utilities to
step up imports and Coal India to ramp up production to
address supply shortages.
On Friday, the coal ministry's top bureaucrat said the
world's second-largest producer, importer and consumer
of coal after China expected to increase output by up to
100 million tonnes in the next three years by reopening
closed mines.
"Earlier we were hailed as bad boys because we were
promoting fossil fuel and now we are in the news that we
are not supplying enough of it," Coal Secretary Anil Ku-
mar Jain told a conference aimed at attracting more pri-
vate players into coal mining.
"This is a very courageous move by the ministry and Coal
India to offer very quickly large supplies of coal."
Months of declining fuel inventories at power plants cul-
minated in the worst power crisis in more than six years
in April, disrupting industrial activity and forcing India to
accelerate coal mining.
A resurgence in India's hunger for coal could mean peak
consumption is years away. The use of the fuel for power
generation is seen growing at the fastest pace in over a
decade this year.
"While we are stressing on developing renewable
sources of energy, coal is also going to be one of the ma-
jor contributors in energy production," Coal Minister
Pralhad Joshi told the conference.
Power use touched a record high during a heat wave in
April and while temperatures have eased this month, they
are forecast to surge again soon.
India's power minister last month asked states to keep
importing for the next three years. His ministry has also
evoked an emergency law in a bid to restart generation at
some idle power plants using imported coal.
India's moves are likely to provide prolonged support to
global prices. While prices came ff near-record highs this
week, fears of the impact of sanctions on Russia - a key
Top News - Dry Freight
Nearly 25 mln tonnes of grain stuck in Ukraine, says
UN food agency
Nearly 25 million tonnes of grains are stuck in Ukraine
and unable to leave the country due to infrastructure
challenges and blocked Black Sea ports including Mariu-
pol, a U.N. food agency official said on Friday.
The blockages are seen as a factor behind high food pric-
es which hit a record high in March in the wake of Rus-
sia's invasion of Ukraine, before easing slightly in April,
the FAO said on Friday.
Ukraine had been the world's fourth largest exporter of
maize (corn) in the 2020/21 season and the number six
wheat exporter, according to International Grains Council
data.
"It's an almost grotesque situation we see at the moment
in Ukraine with nearly 25 mln tonnes of grain that could
be exported but that cannot leave the country simply be-
cause of lack of infrastructure, the blockade of the ports,"
Josef Schmidhuber, FAO Deputy Director, Markets and
Trade Division told a Geneva press briefing via Zoom.
Schmidhuber said the full silos could result in storage
shortages during the next harvest in July and August.
"Despite the war the harvest conditions don’t look that
dire. That could really mean there's not enough storage
capacity in Ukraine, particularly if there's no wheat corri-
dor opening up for export from Ukraine," he said.
Another concern is reports that some grain storage had
been destroyed in the fighting in Ukraine, he added, with-
out giving details.
Since Moscow launched what it calls a "special military
operation" in late February, Ukraine has been forced to
export grain by train over is western border or from its
small Danube river ports rather than by sea.
Earlier this week, the head of the World Trade Organiza-
tion told Reuters she was "seriously worried" about spiral-
ing food prices and seeking solutions alongside other
partners. "It would really help the world if we could evacu-
ate this grain (from Ukraine)," Ngozi Okonjo-Iweala said.
"There's a serious risk of food prices going up and spiral-
ing out of affordability that could lead to more hunger."
Canada to help Ukraine find options to export grain
to ease supply worries -Trudeau
Canada will help Ukraine work out options on how to ex-
6
coal and gas supplier to Europe - and higher Chinese
imports once lockdowns are lifted, have kept prices on
the boil.
port stored grain to uphold global food security that
has been shaken by Russia's invasion of the country,
Canadian Prime Minister Justin Trudeau said late on
Sunday.
Nearly 25 million tonnes of grains are stuck in Ukraine
and unable to leave the country due to infrastructure
challenges and blocked Black Sea ports including Mariu-
pol, a U.N. food agency official said last week. Mariupol
has endured the most destructive fighting of the 10-week
war.
Food prices soared to record highs in March in the wake
of Russia's invasion of Ukraine, the world's No.4 exporter
of maize (corn) in the 2020/21 season and the No.6
wheat exporter. Prices eased slightly in April.
"We know people around the world are going to be starv-
ing because of the actions of Russia," Trudeau told Reu-
ters in an interview.
"There is grain waiting to be shipped in Ukraine. We have
to make sure that Russia doesn't prevent the grain that
the world needs from getting out to the world."
Since Moscow launched what it calls a "special military
operation" in Ukraine in late February, the latter has
been forced to export grain by train over its western bor-
der.
Kyiv has also been looking to use ports on the Danube
river in the country's south to help with exports.
Shipments via Danube river ports could be part of the
solution, Trudeau said, not revealing details, but adding
that a number of options was being considered.
"We're just looking to solve a very direct problem."
Analysts have warned that Ukraine will face a significant
shortage of storing facilities in the 2022/23 season due to
a sharp fall in exports.
Trudeau, in an unannounced visit to Ukraine, said after
his meeting with President Volodymyr Zelenskiy on Sun-
day that Canada was providing $25 million to the U.N.'s
World Food Programme as part of efforts to uphold food
security.
Canada will also remove trade tariffs on all Ukrainian im-
ports to Canada for next year.
"It doesn't serve anyone if Vladimir Putin's war is not just
killing Ukrainians, but is starving people around the
world," Trudeau told Reuters, referring to Russia's presi-
dent.
Picture of the Day

A worker offloads a bag of disposed rice husks before burning them in a traditional kiln to produce organic fertilizer, following renewed
interest in organic fertilizer as global prices for chemical inputs skyrocket due to the war in Ukraine, in Mwea, Kenya.
REUTERS/Thomas Mukoya

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