Ethane Flow Restarts: China Taps US Supply After Rare Earth Deal

Ethane exports to China resumed Wednesday after the US Commerce Department lifted restrictive licensing requirements, and this signals progress in the US China trade truce following rare earth mineral disputes. The move sent eight vessels loaded with petrochemical feedstock toward Chinese ports right now, ending a month-long halt that disrupted energy markets.

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Source: Watcher.GuruSource: Watcher.GuruThe Commerce Department rescinded ethane exports restrictions for companies like Enterprise Products Partners and also Energy Transfer on Wednesday. The United States imposed these restrictions in late May after accusing Beijing of slowing rare earth minerals shipments essential to automotive industries.

Ethane Exports Resume After Trade Resolution

Ethane exports to China had completely stopped in June, and they fell from 257,000 barrels per day in May according to Kpler data. This halt affected approximately half of all US ethane exports, disrupting both American producers and also Chinese petrochemical feedstock manufacturers.

The US China trade truce breakthrough came after both nations resolved rare earth minerals disputes last week. Chinese officials agreed to restore normal shipment schedules while the United States committed to lifting energy restrictions at the time of writing.

Market Recovery and Industry Response

At least eight vessels were heading toward China on Wednesday, having been stalled along the Gulf Coast. Companies had redirected one ship that typically operates between the United States and China to India as they sought alternative markets during the ethane exports disruption.

Vortexa analyst Samantha Hartke said:

“Business as usual then.”

**“Business as usual then.”**Hartke projected July ethane exports would climb back to seasonal normal levels of approximately 240,000 barrels per day, representing complete recovery from the US China trade truce resolution.

Strategic Implications for Petrochemical Markets

Chinese petrochemical firms rely heavily on ethane as petrochemical feedstock because it costs significantly less than naphtha alternatives right now. US producers depend on Chinese demand to absorb excess natural gas liquids that exceed domestic capacity.

The subsequent resumption of ethane exports proves that diplomatic solutions can provide real benefits to the economy. The deal creates a platform for handling future trade disputes more effectively, and shipments of rare earth minerals associated with energy exports create mutual leverage.

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Also Read:****Analyst Reveals China’s Hidden Agenda To Weaken The US DollarThe fact that the restart was achieved successfully demonstrates that even under particular sectors, stability can be established with some diplomatic intervention and this solution can be used as a framework in solving the other tension areas in the interaction of the largest economies in the world.