Chinese buyers who took the first U.S. LNG cargo in more than a year plan to resell it on another market rather than import it, avoiding a 25% tariff. The gas sits in bonded storage at Yangpu, where an empty tanker has docked to load it for re-export.
Chinese buyers plan to resell the first U.S. LNG cargo to reach China in over a year on another market to profit from higher prices elsewhere and avoid paying a 25% tariff, sources familiar with the plans told Bloomberg on Monday.
The Yangpu port in south China received the cargo earlier this month from the Plaquemines LNG export terminal that Venture Global operates in Louisiana’s Plaquemines Parish. But the buyer offloaded the gas into bonded storage without actually importing it into China, because importing would have meant paying the 25% tariff.
An empty tanker recently docked at Yangpu, likely to load the gas for re-export, vessel-tracking data monitored by Bloomberg showed. The move suggests China is not so starved of liquefied natural gas as to be willing to pay the tariff to resume importing the U.S. fuel.
China’s LNG imports rise for a second month
Qatari and UAE exports have been choked by the Middle East war for five months now, yet China’s LNG imports have rebounded in recent weeks amid higher seasonal demand. The country raised its imports for a second month in a row in June as the world’s top LNG buyer prepares for peak summer power demand.
Arrivals jumped 8.3% from a year earlier to 5.68 million tons in June, according to official customs data released last week. That second consecutive monthly increase followed three months of falling cargo arrivals in February, March, and April.
Chinese purchases started recovering in May, rebounding from an eight-year low, as buyers began taking more cargoes in the middle of April and have kept a high rate of imports since.
State buyers look beyond the Strait of Hormuz
China’s giant state LNG importers are also reportedly in talks to secure long-term supplies from exporters that do not need the Strait of Hormuz, sources familiar with the plans told Bloomberg earlier this month. The world’s biggest LNG buyer is seeking to reduce its exposure to gas deliveries from the Persian Gulf.
Source: Oilprice.com
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