Rare US ethanol cargo unloads in China: Correction

Corrects cargo volume in first paragraph based on updated information from Vortexa

A shipment possibly containing fuel-grade US-origin ethanol arrived yesterday at Yizheng in east China's Jiangsu province, after the SC Chongqing loaded 8,700t in Oman's Sohor on 28 April, according to oil analytics firm Vortexa.

The ethanol was originally bought for fuel blending in the Middle East, according to traders, and may have been sold on to buyers in China to free up vessel space for loading oil products following the March collapse in global oil prices. But this was an isolated case, agree market participants, with the arbitrage for US ethanol to China remaining firmly closed.

An enquiry on 19 May for the prompt loading of 15,000t of ethanol on the US Gulf coast destined for north China was later revoked, said shipping brokers. This joined a string of such cancelled enquiries.

China applies a prohibitive 45pc tariff on US ethanol imports, despite its commitment under the "phase one" trade deal to buy $32bn of US agricultural products, including ethanol, during 2020-22.

By Lauren Moffitt