Three Reuters sources said Monday that Beijing made massive purchases of US energy products.
The sources said, "three ships carrying ethanol were heading to China from the US Gulf Coast." They said it's a "sign that ethanol exports from the United States to the country are increasing drastically."
The purchases are so big that they're expected to "surpass the total amount of US ethanol that China imported last year," said Reuters.
Each vessel is carrying 30,000 tons or about 240,000 barrels of ethanol, the sources said. It was unclear what port the ships were headed to in China. One source said two of the tankers left at the end of February.
Searching through US Customs data, we found at least two of the vessels and their International Maritime Organization (IMO) numbers for tracking purposes.
In January alone, China bought "roughly 200 million gallons" (4.76 million barrels) of the US, said Archer Daniels Midland Co-Chief Financial Officer Ray Young.
If all three tankers were filled to the brim, the cargo would be equivalent to about 720,000 barrels of ethanol, more than 506,000 barrels of US ethanol shipped to China in all of last year.
"While China imported an annual record of 4.72 million barrels of US ethanol in 2016, it has not recently been a large importer. However, tightening supplies of domestic corn used to make the biofuel, coupled with comparatively lower US prices, have spurred the need for imports," Reuters said.
The increase comes months after former President Trump has left the White House and the Biden administration has taken control. Even though the Biden administration has promised to move quickly to restore America's relations with the rest of the world, it has yet to improve relations with China.
From Iran to Russia, Europe to Latin America, the administration is cooling tensions after President Trump ran amuck, inciting trade wars and unleashing sanctions. Now cooler tensions are materializing.
We wonder if Beijing's latest purchase of US ethanol is the beginning of a move to show that it plans to hold up to the trade deal agreement it signed in January 2020 to purchase more of the American farm, energy, and manufactured goods.
China miserably failed to meet trade deal requirements under the Trump administration, but maybe all will change under a Biden administration?
Already, China is on a massive buying spree of US corn.
More Top Reads From Oilprice.com:
- How Oil Could Go To $100 Per Barrel
- Biden’s Policies Unlikely To Cause Crash In U.S. Oil Production
- Oil Prices Move Higher Despite Another Major Crude Build