Will China meet its US energy import target for 2020?

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China's 2020 US Energy Import Target Unlikely to Be Met

China's purchases of US energy products through October 2020 reached US$6.61 billion, representing 26% of the US$25.3 billion target set for the year under the Phase 1 trade deal. Despite an accelerated pace of imports, particularly for crude oil, propane, and liquefied natural gas (LNG) since July 2020, the total amount is significantly below the year-end goal. The US$6.61 billion accumulated by the end of October marked a substantial increase from the US$1.29 billion recorded by the end of June, indicating a notable surge in the latter half of the year.
Accelerated Imports in Second Half of 2020

Following a slower start, China significantly ramped up its acquisition of US energy products from July onwards. This surge saw total purchases climb to US$6.61 billion by the end of October, a five-fold increase compared to the US$1.29 billion recorded by the end of June. This acceleration highlights a renewed focus on meeting trade commitments, even as the overall target remained elusive.
Propane and Crude Oil Show Strong Growth

Among the major energy categories, propane imports experienced the most rapid growth since July 2020. This demand is partly attributed to robust needs from China's manufacturing sector for chemicals and increased processing capacity at independent refiners. Furthermore, China's crude oil imports from the US reached a record high of 12.5 million tonnes by the end of October, valued at US$3.88 billion, demonstrating a strong preference for US crude during this period.
LNG Demand Remains Firm

Demand for US liquefied natural gas (LNG) is also projected to remain strong through the winter months. This is driven by Beijing's ongoing policy to replace coal with gas for energy needs and the continued liberalisation of the country's pipeline network. Trade flow data indicated that China was expected to receive a record volume of US LNG in November, underscoring the growing importance of this energy source.
Pace Expected to Slow by Year-End

Despite the impressive gains in the latter half of the year, the pace of US energy product purchases by China is anticipated to slow during the remainder of 2020. This projected deceleration is partly due to increased competition from traditional top suppliers such as Saudi Arabia and Russia, who are reportedly targeting higher volumes to China, the world's top oil importer.

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Will China meet its US energy import target for 2020?

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