In Texas, U.S. and Asian ethanol markets on Wednesday were unaffected by the announcement that the Chinese government would hike the import tariff on undenatured US ethanol to 75% from 65%, according to S&P Global Platts. The higher tariff was announced Tuesday as part of a larger retaliation against U.S. tariffs as trade tensions grow between the U.S. and China.
“The 65% duty [on undenatured ethanol] had already killed the trade flow between the U.S. and China. The 10% hike will not make a big difference,” an Asia-based trader told S&P Global Platts.
“The ethanol arbitrage from the U.S. to China has been closed for the most of the year due to the climbing tariffs, and market participants don’t expect any change imminently,” according to S&P Global Platts.