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

Ethane exports to China resumed Wednesday as the US Commerce Department lifted restrictive licensing requirements, marking a tangible step forward in the US-China trade détente. The MOVE follows last week's resolution of rare earth mineral disputes that had strained bilateral relations. Eight vessels laden with petrochemical feedstock are currently en route to Chinese ports, ending a month-long supply disruption that rattled energy markets.

The Commerce Department's decision rescinds export restrictions previously imposed on firms like Enterprise Products Partners and Energy Transfer. These measures were implemented in late May after Washington accused Beijing of deliberately slowing shipments of rare earth minerals—critical components for automotive manufacturing. At their peak, US ethane exports to China reached 257,000 barrels per day in May before grinding to a complete halt in June, according to Kpler data.

Market participants are now watching for normalization in petrochemical supply chains. The resumption comes as both nations demonstrate willingness to de-escalate trade tensions—China has restored rare earth shipment schedules while the US reciprocated with energy export concessions. This delicate quid pro quo could set the tone for future negotiations on broader trade issues.