September 21, 2018 / 9:45 AM / 9 months ago

Chinese petcoke buyers turning to Russia, Mideast after U.S. tariffs

SHANGHAI, Sept 21 (Reuters) - Chinese importers of petroleum coke are buying more volumes from Russia and the Middle East due to a hefty tariff on shipments from the United States, previously one of China’s main sources of the material used in aluminium and cement production.

China slapped a 25 percent tariff on U.S. petroleum coke, a byproduct of oil refining, from Aug. 23 as part of its escalating trade row with the United States.

The move, when added to a longstanding 3 percent duty, brought China’s total import tariff on U.S. petcoke up to 28 percent in a price-sensitive market.

Liu Tao, chairman of Shandong-based Sinoway Carbon, said his company stopped importing U.S. petcoke in August due to the tariffs. It had earlier this year imported two 50,000 tonne cargoes of fuel-grade petcoke from the U.S. Gulf of Mexico.

“We can still buy from other areas such as China, Russia and the Middle East,” Liu told Reuters on the sidelines of AZ China’s aluminium and raw materials conference in Shanghai.

AZ China is a consultancy focused on China’s aluminium sector. One grade of petcoke is used to make anodes for the aluminium smelting process, and a higher-sulphur grade known as fuel-grade petcoke is used in cement kilns.

Angela Chen, vice president of Beijing-based DQ Carbon Group, said refiners in the United States would feel the sharpest impact.

China imported around 3.5 million tonnes of petcoke from the United States in 2017, nearly half of its total imports of about 7.2 million tonnes, she said.

“U.S. refineries will be largely affected due to their reliance on exports to the China market,” if the trade war keeps raging, Chen said.

The most likely replacements would come from Saudi Arabia and Russia, she said. (Reporting by Tom Daly; Editing by Tom Hogue)

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