Apr 08, 2025 (MarketLine via COMTEX) --
Beijing imposed a 15% tariff on US LNG imports in early February and recently announced additional reciprocal levies on all US goods.
Chinese buyers of liquefied natural gas (LNG) are increasingly reselling US-sourced cargoes as the impact of tariffs significantly raises import costs.
This trend is expected to accelerate with new multi-year supply agreements starting this month, coupled with weakening domestic demand, according to traders and analysts, reported Reuters.
Beijing imposed a 15% tariff on US LNG imports in early February and recently announced additional reciprocal levies on all US goods, effective from 10 April.
This mirrors US President Donald Trump's decision to impose additional tariffs of 34% on Chinese goods.
As a result, China, the world's largest LNG buyer, imported no US LNG in March, based on data from Kpler and LSEG.
An increase in resales is anticipated following the commencement of commercial operations at Venture Global's Calcasieu Pass LNG project.
Sinopec is contracted to purchase one million tonnes (mt) of LNG annually from Venture Global, starting this month, with April cargoes already resold.
CNOOC is also set to begin a five-year contract in April for 500,000 tonnes annually from Venture Global.
Chinese importers Sinochem Group, Foran Energy Group and PetroChina have been diverting US-sourced LNG cargoes, as noted by ICIS, the report said.
Four Chinese traders confirmed that US LNG buyers are placing cargoes in Europe or other Asian markets due to the unviable nature of sales to China under the current tariff regime.
A trader with a state-owned company mentioned that imports ceased after the initial 15% retaliatory tax, and the new tariffs further deter imports.
Most of their free on board-based supplies have been directed to Europe, where arbitrage is more favourable.
China imported 4.5mt of LNG in February, the lowest monthly level since April 2022.
Chinese buyers are also facing weak spot demand, with Asian prices at $13 per million British thermal units (MBtu) on 4 April, compared with delivered LNG prices to Europe at around $12/MBtu.
China's tier-two LNG buyers, primarily city-gas distributors, are looking to pay $8aEUR"9/MBtu for spot price imports.
The country halted imports of LNG from the US for 40 days last month, the longest pause in nearly two years.
Due to trade tensions, traders have had to redirect their shipments to dodge Beijing's tariffs on super-cooled fuel. This has affected the global market for LNG.
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COMTEX_464341419/2227/2025-04-08T09:35:21
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