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LNG: Chinese Traders Look to Shift US-Origin LNG Cargoes amid Tariffs: Platts

LNG
USAPACCommoditiesChinaEnergy BulletsBulletPower BulletsNorth America

Chinese traders are seeking to manage their exposure to US-origin LNG cargoes following Beijing's announcement of a 15% retaliatory tariff, Platts said.

  • This has led to efforts to swap US-origin spot LNG for LNG from other suppliers and redirect US LNG to other destinations to avoid the additional tariffs.
  • Major Chinese trading houses and second-tier importers are involved in these swaps, Platts added.
  • The tariff further incentivises US LNG-Europe arbitrage flows, an ongoing trend since 2022. The shift is driven by weak domestic Chinese demand and strong EU prices.
  • The long-term marketing of US LNG to China is likely to be impacted, with traders reducing future exposure to US-origin LNG.
  • US origin-China LNG contracts now exceed 23m mtpa, 19% of China’s LNG contracts.
  • This could hinder FIDs on new US liquefaction capacity, as China is a major growth market, Platts added.
  • Tariffs could also accelerate China's supply diversification towards sources like Russia and Qatar.
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Chinese traders are seeking to manage their exposure to US-origin LNG cargoes following Beijing's announcement of a 15% retaliatory tariff, Platts said.

  • This has led to efforts to swap US-origin spot LNG for LNG from other suppliers and redirect US LNG to other destinations to avoid the additional tariffs.
  • Major Chinese trading houses and second-tier importers are involved in these swaps, Platts added.
  • The tariff further incentivises US LNG-Europe arbitrage flows, an ongoing trend since 2022. The shift is driven by weak domestic Chinese demand and strong EU prices.
  • The long-term marketing of US LNG to China is likely to be impacted, with traders reducing future exposure to US-origin LNG.
  • US origin-China LNG contracts now exceed 23m mtpa, 19% of China’s LNG contracts.
  • This could hinder FIDs on new US liquefaction capacity, as China is a major growth market, Platts added.
  • Tariffs could also accelerate China's supply diversification towards sources like Russia and Qatar.