American Lifts Restrictions on Ethane Exports to China

According to Reuters, the U.S. government removed obstacles to resuming ethane exports to China on Wednesday, sending letters to energy companies Enterprise Products Partners and Energy Transfer to cancel restrictive licensing requirements that had been implemented just weeks earlier, indicating that the U.S.-China trade truce is on track.

It was reported that in late May to early June this year, the U.S. government imposed restrictions on multiple exports to China, including ethane, citing China's restrictions on rare earth exports. Until last week, the U.S. Department of Commerce adjusted its policy, informing companies such as Enterprise Products, Energy Transfer, and ethane traders Satellite Chemical USA and Vinmar International via letter that they could load ethane onto ships heading to China, but could not unload ethane in China without permission, taking the first step toward lifting the restrictions.

Data from the Kpler platform's vessel tracking system showed that U.S. ethane shipments to China stopped in June since the licensing requirements were introduced. The export volume dropped sharply from an average of 257,000 barrels per day in May.

On Wednesday, at least eight ships were heading to China, whereas previously, due to the restrictions, these ships had been stalled along the U.S. Gulf Coast in June. As some companies sought alternative markets, at least one ship usually traveling between the U.S. and China was headed to India in June.

Samantha Hartke, an analyst at Vortexa, said regarding the letter on Wednesday: "Everything is back to normal." She added that she expects ethane exports to rebound to a seasonal normal level of about 240,000 barrels per day in July.

Currently, about half of the U.S. ethane exports are sold to China. Ethane, a byproduct of shale gas, is mainly used in the petrochemical industry and is a low-cost raw material commonly used by Chinese chemical companies. The export disruption not only hit U.S. producers but also affected downstream manufacturers in China that rely on ethane.

U.S. Commerce Secretary Ritter announced on June 26 that the United States and China have reached a final consensus on the trade agreement reached in Geneva last month, stating that the U.S. would lift trade retaliatory measures against China as long as China exports rare earths to the U.S.

Original article: https://www.toutiao.com/article/1836590996911107/

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