Ethanol imports from the US into China face a plunge in the short-term following Beijing’s announcement yesterday to place additional tariffs on 128 US products, although market shortages will likely push China back towards US supply eventually.
Included in the new tariff list, US ethanol will be subject to an extra 15% tax on top of existing duties of 30%, making domestic suppliers much more attractive.
“The price difference is gone. We will suspend imports for now,” the manager of a private oil refinery told the South China Morning Post.
Market analysts, however, forecast that in order for China to meet its target of 10% ethanol content of national petrol supply by 2020, imports will have to resume whether from the US or elsewhere.