The US-China Trade War Is Impacting LNG Shipping As Well – Banchero Costa
Despite more than positive predictions at the start of 2019, regarding the future prospects of the US LNG exports, unfortunately, Trump’s trade war with China has caught up, complicating things for US LNG exporters, who are now being forced to find other buyers. Last December, the EIA carried a report, declaring that US liquefied natural gas export capacity will reach 8.9 billion cubic feet per day by the end of 2019, making it the third largest in the world behind Australia and Qatar. Currently, US LNG export capacity stands at 3.6 Bcf/d, and it is expected to end the year at 4.9 billion cubic feet per day as two new liquefaction units called trains become operational.
In a recent report, shipbroker Banchero Costa said that “The United States started exporting LNG from the lower 48 states in 2016 after the surge of natural gas production that followed the shale revolution and the development of new export capacity. In 2017 the US was already a net exporter of natural gas ranking 6 th in the top exporting countries’ list following Qatar, Australia, Malaysia, Nigeria and Indonesia. In 2018 exports grew a staggering 53% and Indonesia and Nigeria were overtaken. Exports boomed towards South Korea +91%, +118 billion cubic feet, Latin America (+46%, +97billion cubic feet, Japan +130%, 69 billion cubic feet, Europe +62%, +61 billion cubic feet and India +176%, +37 billion cubic feet.”
According to the shipbroker, “in 2018 half of the US LNG exports went to Asia followed by a 28% to Latin America, 15% to Europe, 5% to the Middle East and 1% to Africa. Of the 51% that ended up in Asia the largest share was taken by South Korea, followed by Japan, China and India. Exports to China, the world’s second largest and the fastest growing importer of the fuel, were 10% lower, – 10blncf and so far this year only 2 vessels went from US to China compared to 14 in the same period in 2018. Last Monday China announced it would boost the tariff on US LNG imports from June to 25% from the current 10% in retaliation against the White House increasing tariffs on USD 200 billion worth of Chinese goods to 25% from 10%. The consensus is that the 25% tariff on US LNG exports could halt the trade between the two countries.”
Source : Nikos Roussanoglou, Hellenic Shipping News Worldwide