US Ethane Exports to China Face New Licensing Hurdles, Disrupting Trade

US Ethane Exports to China Face New Hurdles

Chinese purchases of U.S. ethane, a key petrochemical feedstock, are facing renewed uncertainty. The Commerce Department is now requiring exporters to seek licenses for shipments to China, creating potential disruptions in the trade.

Licensing Requirements

Washington has ordered companies to cease shipping goods, including ethane and butane, to China without a license and has revoked existing licenses for some suppliers. This action is poised to impact Chinese imports of U.S. ethane significantly.

Impact on Trade

In 2024, Chinese purchases of U.S. ethane reached a record high of 492,000 barrels per day, representing nearly half of total U.S. exports, according to the U.S. Energy Information Administration.

Current Status

At least two Very Large Gas Carriers are currently waiting at U.S. ports to load ethane. Another fifteen tankers are en route or waiting near the U.S. Gulf Coast, anticipating loading approximately 284,000 bpd of ethane in June, as indicated by Kpler data.

Industry Reactions

"It's going to be a major issue if all exports are suspended," stated a Chinese ethane importer who wished to remain anonymous. Companies like Enterprise are evaluating their procedures in light of these changes.

Potential Consequences

If the restriction persists, Chinese petrochemical plants may face critical feedstock shortages, potentially leading to project delays. Ineos may divert its ethane cargo to Europe.