Vale’s Giant Iron Ore Ship Finally Calls on China Port
By Esther Tanquintic-Misa | December 29, 2011 4:32 PM EST
After more than a six-month delay timeframe, Vale's humongous iron ore ship Berge Everest finally called on China's Dalian port.
The 388,000-tonne vessel reached the Dalian port fully loaded from Brazil with 350,000 tonnes worth of iron ore. It started delivering its iron ore cargo at Dalian port on Wednesday and is expected to depart on Saturday, Reuters News said, citing unnamed shipping industry sources.
"The ship will need 2-1/2 days to discharge such cargo," a port agent reportedly said.
However, it is not clear if the discharged iron ore already has a buyer in China.
The Berge Everest is one of the four vessels BW Group will use to haul iron ore for Vale, T.S. Ang, a technical executive at BW Fleet Management in Singapore, the vessel's owner, told Bloomberg News.
"This is a huge success. It opens the door and helps Vale break a paradigm in the shipping industry," said Pedro Galdi, a steel and mining analyst. "The problems getting their ships into China had created a very bad feeling, but China needs the ore and Vale's ore is of very high quality."
In June, Vale's first megaship cargo to China was declined due to the lack of a permit.
Earlier this month, the newest member of the "Valemax" fleet, the Vale Beijing, developed cracks in its hull on its maiden voyage. It is 50 per cent bigger than most ore carriers and one of the largest in the world.
Recognised as the world's biggest iron ore miner, Vale exports 45 per cent of sales to China, the largest consumer of the steelmaking ingredient.
Vale is spending some $8.1 billion on the valemax vessels, including 19 very large ore carrier purchases and renting another 16 in long-term contracts, in a bid to lower freight costs from Brazil to China.
The plan received strong opposition from Chinese ship owners who claimed it will exacerbate overcapacity and cause industry wide losses.
It costs $28 per tonne to $30 per tonne to ship ore from Brazil to China in large "Capesize" ships that are the Valemaxes' predecessors, compared to the $14 per tonne to $15 per tonne from Australia to China, according to AXSmarine figures quoted by Reuters News.
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