China has begun buying US liquefied petroleum gas (LPG) again after a hiatus of nearly 20 months as Beijing waived punitive tariffs to boost imports of US goods as part of the China-US Phase 1 trade deal, industry sources said, reported Reuters.
Importers have rushed to apply for waivers for the 25% tariff to buy the fuel, a by-product from US shale gas production, after Beijing started granting exemptions this month for nearly 700 US goods.
About a dozen firms – including China Gas Holdings, a piped gas distributor and LPG trader, and Oriental Energy, a manufacturer using LPG to make petrochemicals – have been granted the tariff waivers, according to two veteran LPG traders, an investment officer and analysts at IHS Markit. With the exemptions, US LPG is subject only to a 1% import duty, same as rival supplies from the Middle East.
“US LPG provides us a diversified source of supply to keep our overall import cost low,” said Tan Yuwei, an investor relation officer with China Gas, adding that the firm has booked 60,000 tons of US fuel for late April arrival.