U.S. LPG FOR JAPAN UP

REUTERS - Japanese utilities and industrial companies are snapping up U.S. cargoes of liquefied petroleum gas (LPG) that are seeking a new home after Chinese buyers started to shun them amid an escalating trade war between Washington and Beijing.

Taking in fuel that would otherwise be heading for China means Japanese imports of U.S. LPG are set to stay strong after already hitting record levels earlier this year.

Robust Japanese purchases of LPG, often used as fuel for transport or cooking, underscore how the impact from the festering trade dispute between Washington and China is rippling across supply chains around the world.

The uptick could also help Tokyo rebuff pressure from U.S. President Donald Trump to cut a multi-billion dollar trade surplus or face rising tariffs.

"U.S. LPG is facing difficulties reaching China," said Seiya Araki, president of Astomos Energy, a major Japanese buyer of the fuel.

"That has helped push large flows of U.S. LPG to Japan and South Korea, and there's a high chance that the share of U.S.-produced LPG would rise further."

Japanese government data released on Thursday shows the country's imports of LPG from the United States jumped about 13 percent in July from the same month last year to around 460,000 tonnes, while ship tracking data indicates that just a single U.S. LPG cargo has left for China since the start of July.

Washington and Beijing have been locked in a tit-for-tat trade battle, with both sides slapping steep tariffs on each other's goods in a fight that has sparked dire warnings of economic doom and gloom.

China announced earlier this month that it would impose 25 percent additional tariffs on imports of 333 U.S. goods worth $16 billion from Aug. 23, including LPG.

In the United States, LPG is a by-product of natural gas production and U.S. exports have surged on the back of the shale gas boom of the past decade. U.S. LPG exports now compete with supplies from the Middle East.

In Japan, the world's No.3 importer of LPG, U.S. supplies hit an all-time high of 6.09 million tonnes in 2017. They marked a monthly record of 738,016 tonnes in April this year.

U.S. supplies of the fuel, which includes propane and butane, amounted to about 70 percent of total imports in May, according to the Japan LP Gas Association.

The U.S. has become increasingly price competitive. Taking freight and insurance into account, Japanese government data shows U.S. LPG prices are mostly cheaper than Middle Eastern benchmark Saudi Arabian supplies.

Trump has already imposed tariffs on Japanese steel and aluminium and is threatening to place duties on crucial auto exports from Japan if trade isn't more balanced.

Talks on "free, fair and reciprocal" trade between the U.S. and Japan ended last Friday without any agreement, with the two sides set to meet again in September.

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Earlier:

2018, July, 25, 09:25:00 JAPAN'S LNG DOWN REUTERS - Japan, the world’s biggest importer of LNG, brought in 5.55 million tonnes of the fuel in June, down more than 10 percent from a year earlier, official data showed on Wednesday. That was the lowest monthly import number since May 2016.

2018, July, 4, 12:01:00 THE NEW JAPAN'S ENERGY PLAN WNN - A new basic energy plan that sets goals for Japan's energy mix to 2030 and presents scenarios to 2050 was today approved by the Cabinet. Under the plan, nuclear will remain a key energy source, accounting for 20-22% of the country's electricity generation up to 2030.

2018, June, 4, 13:45:00 THE DRAMATIC U.S. GOVERNMENT PLATTS - "Japanese companies don't want to stop imports suddenly," he said, adding the US position needed clarifying. "The situation in the US government is drastically changing every day."

2018, May, 23, 10:35:00 U.S. - CHINA ENERGY TRADE PLATTS - China became the largest contributor to global LNG consumption growth in 2017. It surpassed South Korea as the world's second largest LNG importer and its share of global LNG demand is expected to converge with that of Japan by 2030.

2018, April, 27, 10:40:00 JAPAN'S LNG DOWN 2.6% PLATTS - Japan's LNG imports slipped 2.6% year on year to 7.9 million mt in March with imports from Papua New Guinea dropping, Ministry of Finance data released Thursday showed. PNG LNG had shut its plant after a massive earthquake hit the region on February 26. Japan's imports from PNG fell 65.7% from a year ago to 145,580 mt, or about two cargoes, in March.

2018, February, 7, 07:50:00 JAPAN'S LNG MAXIMUM REUTERS - Japan’s imports of LNG rose to nearly 8.7 million tonnes last month, up 8 percent from December and the largest volume since at least January, 2013, according to ship tracking data on Thomson Reuters Eikon that stretches back five years.

2017, December, 22, 22:05:00 JAPAN'S LPG UP TWICE REUTERS - Japan’s liquefied petroleum gas (LPG) imports from the United States are expected to double in 2017 to a record and account for around for around half of its total purchases, government and shipping data showed.