China received ethanol from the US in May for the first time in two years, according to customs data.
Nearly 9,000m³ of denatured ethanol was imported in May, the most since taking 97,000m³ in the same month in 2018. But the cargo was likely a one-off cargo, redirected from the Middle East rather than a sign of thawing tensions between the two countries.
A trade war between the US and China broke out in 2018, resulting in import tariffs rising to 70pc from 30pc and closing the arbitrage. Steps have been made since to mend the relationship including the "phase one" deal signed in January. But with China's import tariffs for US cargoes still at a prohibitive 45pc the trade barrier continues.
The US volumes comprised all the May ethanol imported by China in May compared with 6,000m³ a year earlier from Pakistan and minimal volumes in April.
China exported 94,000m³ of ethanol in May, up from 61,000m³ in April and almost zero in May last year amid surging hand sanitizer demand because of the Covid-19 pandemic. South Korea, Saudi Arabia, Spain and the UAE were the top buyers.