HomeNewsU.S. ethane exports to China hit new roadblock with license requirement

U.S. ethane exports to China hit new roadblock with license requirement

5/30/2025
  • Two VLGCs wait to load ethane for China 
  • 13 tankers due to load ethane for China in June 
  • Enterprise warns ethane, butane exports to China could fall

Chinese purchases of U.S. ethane, a key petrochemical feedstock, face fresh uncertainty after the U.S. Commerce Department told exporters to seek licenses to export to China, according to trade sources and shipping data.

Washington (U.S.) ordered a broad swathe of companies to stop shipping goods, including ethane and butane, to China without a license and revoked licenses already granted to some suppliers. The move is the latest disruption in Chinese purchases of U.S. ethane, which hit a record of 492,000 bpd in 2024, or nearly half of U.S. exports, according to the U.S. Energy Information Administration.

Early last month, China increased levies on imports of U.S. goods to 125% but waived the tariff for petrochemical producers who rely on the U.S. for almost all their ethane imports.

At least two Very Large Gas Carriers were waiting at U.S. ports to load ethane this week while 15 more tankers are headed to, or waiting off, the U.S. Gulf Coast, to load about 284,000 bpd of ethane in June.

"It's going to be a major issue if all exports are suspended," said a Chinese ethane importer. "We are cautiously watching if exporters can obtain new export licenses soon."

VLGC Pacific Ineos Grenadier was supposed to load ethane for Ineos at Enterprise Products Partners' Morgan's Point terminal at La Porte, Texas, has docked there since last Friday, Kpler and LSEG data showed.

Stl Qianjiang is anchored near Energy Transfer's Nederland terminal, due to load ethane for Chinese petrochemical firm Satellite Chemical, the data showed.

"The market disruption could be immediate," Julian Renton, an analyst at East Daley Analytics, said in a note. A trade source said Ineos, which also buys ethane for its plants in Europe, may divert its cargo there.

In a filing, Enterprise, a top handler of ethane and butane, said it was evaluating its procedures and internal controls and could not determine if it would be able to get a licence.

Traders said there may be limited near-term impact on Chinese operators, as they have sufficient stocks.

East Daley's Renton said if the restriction holds, Chinese petrochemical plants could face critical feedstock shortfalls, while projects may stall.

Chinese petrochemical firms use ethane as a cheaper feedstock alternative to naphtha, while U.S. oil and gas producers count on China to buy their natural gas liquids as domestic supply exceeds demand.

Shares of ethane importers Satellite Chemical were down 3.1% on Friday, while Wanhua Chemical stock lost 1.3%.

Related News

Comments

Search