US ethane producers said that the government has abolished the license requirements for shipping ethane to China, reducing a significant trade obstacle. The Bureau of Industry and Security implemented the restrictions in late May, requiring licenses for ethane shipments to Chinese partners. While the Commerce Department relaxed the requirements last week, enabling ethane to be loaded for China-bound shipments, businesses still needed license to discharge the cargo in Chinese ports.
According to documents from Enterprise Products Partners and Energy Transfer LP, those prohibitions have been lifted, allowing delivery to Chinese ports without further US permission. The reversal is likely to restore a crucial commerce channel that the previous controls had hampered. Following the license requirement, ethane exports to China fell dramatically, forcing tankers to reroute to alternative destinations such as India.
Ethane exports to China account for over half of total US ethane shipments. The disruption impacted both US producers and Chinese petrochemical companies, which prefer ethane to naphtha due to its cost advantage. With the limitations eased, economists expect exports to recover, with July levels likely returning to seasonal norms of around 240,000 barrels per day.
