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AlwaysFree: Sources: China Resumes US LPG Imports After Waiving Import Tariffs

Author: SSESSMENTS

China has resumed imports of liquefied petroleum gas (LPG) from the US after waiving punitive tariffs to ramp up purchases of US energy products as part of the phase-one US-China trade deal, industry sources said. With the waiver, importing US LPG incurs only a 1% import tariff, the same duty imposed on Middle Eastern LPG. 

Chinese importers such as China Gas Holdings, Oriental Energy, and some petrochemical plant operators have been granted waivers for the 25% tariff to buy US LPG, the sources said. Many other importers have also applied for the exemption after Beijing announced the move this month for almost 700 US products.

Tan Yuwei from China Gas said the company had booked 60,000 tons of US LPG planned to arrive in China in April. Tan said US LPG helped them to keep import costs low and provide a diversified source. An official from Oriental Energy confirmed that it had been granted the waiver, but refused to disclose any purchases.

Analysts estimated that China might have booked about 220,000 tons of US LPG so far. However, a slow recovery in Chinese petrochemical production after the COVID-19 outbreak can hold back purchases. New supply from the US is expected to put pressure on prices of rivalling cargoes from Saudi Arabia and Qatar.

Benchmark US spot butane prices in Mont Belvieu, Texas have declined by more than 60% over the past month to $0.21/US gallon. This is equal to $95/ton, marking the lowest prices since at least 1990, thanks to the crash in oil prices. It is also lower than the April Asian LPG paper of $150/ton.

China was the second-largest buyer of US LPG in 2017, receiving 3.6 million tons of the fuel. However, the country stopped imports of US LNG for 20 months in late 2018 through 2019 due to the trade war.

Tags: All Feedstocks,AlwaysFree,Asia Pacific,China,Crude Oil,English,Gas,NEA

Published on March 26, 2020 11:17 AM (GMT+8)
Last Updated on March 26, 2020 11:19 AM (GMT+8)