Sales of US ethanol to drop in China as Beijing’s new tariffs take effect
Chinese users of ethanol will have to turn elsewhere - at least for now - experts said
Sales of US ethanol will likely drop in China after Beijing slapped higher tariffs on the liquid - but the Chinese will eventually have to return to the overseas market to meet government targets for using the fuel, industry participants and analysts said on Monday.
China said late on Sunday it will slap an extra 15 per cent tariff on ethanol imports from the United States, part of its response to US duties on aluminium and steel imports. The previous duty was 30 per cent.
The tariffs, effective Monday, will neutralise cost savings from importing cheaper US ethanol versus domestic supply, said three sources that participate in the market.
Ethanol, an alcohol typically produced from corn or sugar, is often mixed with petrol to reduce air pollution from vehicle emissions.
“The price difference is gone. We will suspend imports for now,” said a manager at a private oil refinery, adding that he was considering turning to domestic suppliers for ethanol to blend into petrol.
