Monday, February 4, 2019
(February 4, 2019) — China Gas, a Hong Kong-listed gas operator and service provider, is taking delivery of a small lot of Canadian-origin LPG from Petrogas (Calgary) via a third party at the U.S. West Coast export terminal in Ferndale, Wash. as Chinese buyers seek alternative, cheaper supply in the face of the U.S.-China trade dispute, S&P Global Platts reports.
The cargo was expected to arrive in China early this month, according to a China Gas source. The mixed LPG cargo is being shipped aboard the very large gas carrier NS Frontier, which sailed from Ferndale in mid-January and is scheduled to arrive at Weizhou in southeast China. Shipping sources said the NS Frontier was fixed by Petrogas for Jan. 7-8 loading from Ferndale, destination east, at a price in the high $30s a metric ton.
Another Chinese trade source said the cargo could have been first delivered by AltaGas (Calgary) by rail to Petrogas’ Ferndale terminal, which has a delivery capacity of 30,000 bbld. Petrogas acquired the terminal from Chevron in 2014. The trade source said that other than China Gas, two other Chinese firms would also be receiving portions of the 40,000- to 44,000-metric ton cargo, through their names could not be immediately confirmed.
It was not known whether China customs officials will impose an additional 25% tariff on the non-U.S. cargo that was loaded at a U.S. port. The source said it was purchased at a relatively low price, but declined to disclose the traded level. Trade sources said that the parties involved in bringing the cargo to China would have to prove that, while it was loaded in the U.S., it was of Canadian origin to avoid paying the 25% import tariff. A shipping source said the parties might have to swap the origin of the cargo. “The U.S. cargo would have to go to Japan and they have to provide an Arab Gulf-origin cargo to the Chinese.”
Propane was on the list of U.S. products that was slapped with a 25% import tariff in response to U.S. tariffs on Chinese goods last year, prompting Chinese importers to avoid importing LPG from the U.S. and turn to alternative supplies, especially from the Middle East and Africa.
The Chinese trader said that in view of the U.S.- China trade dispute, Chinese buyers would be open to buying more Canadian LPG, which they believe would offer them sharper discounts while enjoying cheaper freight rates due to the shorter distance across the Pacific.
(SOURCE: The Weekly Propane Newsletter, February 4, 2019)
The cargo was expected to arrive in China early this month, according to a China Gas source. The mixed LPG cargo is being shipped aboard the very large gas carrier NS Frontier, which sailed from Ferndale in mid-January and is scheduled to arrive at Weizhou in southeast China. Shipping sources said the NS Frontier was fixed by Petrogas for Jan. 7-8 loading from Ferndale, destination east, at a price in the high $30s a metric ton.
Another Chinese trade source said the cargo could have been first delivered by AltaGas (Calgary) by rail to Petrogas’ Ferndale terminal, which has a delivery capacity of 30,000 bbld. Petrogas acquired the terminal from Chevron in 2014. The trade source said that other than China Gas, two other Chinese firms would also be receiving portions of the 40,000- to 44,000-metric ton cargo, through their names could not be immediately confirmed.
It was not known whether China customs officials will impose an additional 25% tariff on the non-U.S. cargo that was loaded at a U.S. port. The source said it was purchased at a relatively low price, but declined to disclose the traded level. Trade sources said that the parties involved in bringing the cargo to China would have to prove that, while it was loaded in the U.S., it was of Canadian origin to avoid paying the 25% import tariff. A shipping source said the parties might have to swap the origin of the cargo. “The U.S. cargo would have to go to Japan and they have to provide an Arab Gulf-origin cargo to the Chinese.”
Propane was on the list of U.S. products that was slapped with a 25% import tariff in response to U.S. tariffs on Chinese goods last year, prompting Chinese importers to avoid importing LPG from the U.S. and turn to alternative supplies, especially from the Middle East and Africa.
The Chinese trader said that in view of the U.S.- China trade dispute, Chinese buyers would be open to buying more Canadian LPG, which they believe would offer them sharper discounts while enjoying cheaper freight rates due to the shorter distance across the Pacific.
(SOURCE: The Weekly Propane Newsletter, February 4, 2019)
