BEIJING: China has accelerated imports of crude oil, propane and liquefied natural gas (LNG) from the US since July, but total energy product purchases through October remain far short of targets for 2020 set out in the Phase 1 trade deal with Washington.
Over the first 10 months of 2020, China’s purchases of US crude oil, LNG, propane, butane and other energy products totalled US$6.61 billion, about 26% of the US$25.3 billion target, according to Reuters calculations based on Chinese customs data.
While the gap to the target is unlikely to be bridged by year-end, US and Chinese trade officials reaffirmed their commitment to the deal in August, and China’s imports of US energy products have increased sharply the second half of the year.
The US$6.61 billion accrued through October marks a five-fold jump from the US$1.29 billion amassed by end-June.
Imports of propane, a key component of liquefied petroleum gas (LPG) used as fuel for cars, heating and to produce petrochemicals, grew at the fastest pace of all major energy products since July.
Robust demand for chemicals from China’s revitalised manufacturing sector, along with new processing units at independent refiners Zhejiang Petroleum & Chemical and Zhejiang Huahong have fuelled the import drive.
LNG demand is also expected to be firm through winter as Beijing continues to replace coal with gas and as the country liberalises its pipeline network.
Refinitiv trade flows data show China may receive a record 1.26 million cubic metres of US LNG in November.
China’s crude oil imports from the US hit a record 12.5 million tonnes through October, worth US$3.88 billion, but the pace of US purchases is expected to slow through the remainder of 2020 as top suppliers Saudi Arabia and Russia target increased flows to the top oil importer.