China Mulls Hiking Import Duty on US Denatured Ethanol by 15% to 45%
by Srijan Kanoi (Platts) China’s Ministry of Commerce said Friday that they might impose an additional 15% duty, along with the existing 30% duty, on denatured ethanol imports from the US if both China and US fail to reach a trade compensation agreement within stipulated time.
The rising tension between both the countries has added pressure to the Asian fuel ethanol market as rumors of a duty hike gathered pace through the week. The Asian fuel ethanol marker was down by $11/cu m from the beginning of the week to 501/cu m CIF Philippines Thursday.
“Major fuel ethanol importers in China are waiting on the sidelines to get more clarity before booking new cargoes from the US,” a trader said.
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“The hike in import duty [for denatured ethanol from the US to China] to 45% will kill the imports into China, much like it did in 2017,” a trader said.
China’s ethanol imports in 2017 were severely impacted by the 30% import duty that was imposed on denatured ethanol in January 2017. As a result, denatured ethanol imports into China had dropped from 871,829 cu m in 2016 to 8,697 cu m in 2017, S&P Global Platts data showed.
Also, exports from the US to China for denatured fuel ethanol had drastically decreased from 854,392 cu m in 2016 to only 39 cu m in 2017, the data showed. The proposed 15% hike is part of a wider statement released Friday, which consisted a list of 128 commodities that could be subject to duties, impacting about $3 billion in US imports to China. READ MORE
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China hikes import duty on US denatured ethanol by 15% to 45% (Platts)
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Excerpt from Renewable Fuels Association: On Monday, China added a 15% tariff on U.S. ethanol imports. The move came in response to the Trump Administration’s announcement of duties on imported aluminum and steel products. This is in addition to an already-imposed duty of 30%, making the total tariff 45% on U.S. ethanol. Renewable Fuels Association President and CEO Bob Dinneen had the following statement:
“Once again we were disappointed to learn of China’s retaliatory actions against ethanol. China was the third-largest market for U.S. ethanol exports in 2016, accounting for almost 20% of total exports. However, once the country imposed its first U.S. ethanol import tariff, shipments to China nearly disappeared. In recent months, U.S. ethanol shipments to China resumed as the cost competitiveness of ethanol produced in the U.S. overwhelmed China’s protectionist policy. The imposition of this new additional tariff will likely again preclude sales to the country.
“This one-two protectionist punch will ultimately harm Chinese consumers who are being denied access to the lowest-cost, highest-octane, and cleanest fuel on the planet. But it will also hurt farmers in the U.S. who have worked to build value-added markets for their commodities here and abroad.
“RFA urges the administration to work aggressively to have this latest attack on America’s rural economy removed as quickly as possible.” READ MORE
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