Key facts
- Chinese buyers plan to resell the first U.S. LNG cargo received in over a year.
- The cargo was bought from Venture Global's Plaquemines LNG export terminal.
- The resale is intended to profit from higher prices elsewhere and avoid a 25% tariff.
- The gas was offloaded into bonded storage and not imported into China.
- China's LNG imports increased for the second consecutive month in June.
Chinese buyers who received the first U.S. liquefied natural gas (LNG) cargo in over a year are planning to resell it on another market rather than import it into China. Sources familiar with the plans told Bloomberg that the intention is to profit from higher prices elsewhere and avoid paying a 25% tariff.
The cargo, originating from Venture Global's Plaquemines LNG export terminal in Louisiana, arrived at the Yangpu port in south China earlier this month. However, the gas was placed into bonded storage without formal import into China, as the buyer sought to circumvent the tariff.
Vessel-tracking data indicates an empty tanker has docked at the port, likely to load the gas for re-export. This development suggests that China's domestic LNG supply is sufficient, making it unwilling to absorb the additional cost of U.S. imports.
Despite ongoing Middle East conflict impacting Qatari and UAE exports, China's overall LNG imports have seen a rebound in recent weeks, driven by higher seasonal demand. Official customs data showed that China's LNG imports rose by 8.3% year-on-year to 5.68 million tons in June, marking the second consecutive month of increase after a period of decline. This recovery began in May, following a trend of buyers purchasing more cargoes from mid-April onwards.
Furthermore, major Chinese state LNG importers are reportedly in discussions to secure long-term supplies from exporters that do not rely on the Strait of Hormuz, as the world's largest LNG buyer aims to diversify its supply routes away from the Persian Gulf.