More shots are being fired in the increasingly bitter dispute between Vale and China’s ship-owing interests (read the Chinese Government). Vale is irrevocably committed to their now-380,000 DWT ore carriers under construction in China and South Korea. To circumvent the ban on their ships unloading at Chinese ports, Vale is setting up transhipment hubs in Malaysia (a land-backed ore terminal) and Subic Bay (a floating transhipment vessel) to break down the large into smaller shipments which can enter China ‘under the radar’.
Conceptual model of Vale's Subic 280,000 DWT Transhipper
Sadly, it is a futile exercise for both parties as China needs Vale’s iron ore for its steel industry.
The following article is courtesy of Lloyd’s List.
The Antipodean Mariner
Lloyds List: China shipowners take off the gloves in Vale scrap
China Shipowners Association takes aim at Philippines and Malaysian transhipment centres
Friday 2 December 2011
THE China Shipowners’ Association has taken aim at Brazilian iron ore giant Vale’s plans for transhipment hubs in the Philippines and Malaysia in the most stinging public rebuke yet against the miner, writes Tom Leander in Hong Kong.
CSA vice-executive chairman Zhang Shouguo also condemned Vale’s plan to float 400,000 dwt ships to bring down its transport costs into China as a matter of “monopoly and unfair competition”.
“Vale’s current task of top priority is to immediately stop its ambitious fleet expansion plan and especially cease the construction of 400,000 dwt very large ore carriers and other types of bulkers,” Mr Zhang said.
Earlier this year, Mr Zhang condemned global mining companies in general for seeking to control the price of transport, which he decried as monopolistic and unfair to Chinese shipowners, but did not mention Vale. The current statements go a step further. They signal that the gloves are off against the world’s largest iron producer in the dispute over its so-called Valemax vessels.
Four of the these vessels have been delivered, the most recent being the long-awaited dispatch of Vale China , the first 400,000 DWT vessel to be built in a Chinese yard. Vale’s plan has become so sensitive that Rongsheng Heavy Industries , which built the vessel, downgraded the size of Vale China and an order of 11 additional Valemax ships to be built in Rongsheng to 380,000 dwt.
Vale has yet to receive permission from local authorities to allow the Valemax vessels to enter China’s ports fully loaded. The inability to bring the Valemax vessels directly to China has prompted Vale to establish transhipment centres of iron ore in Malaysia and now Subic Bay in the Philippines. In September, Vale and the Philippines Subic Bay Metropolitan Authority signed a memorandum of agreement to build a transhipment hub by deploying a floating terminal to be located at the deepwater harbour near the Bataan peninsula. From the hub Vale plans to deliver its iron ore via feeder vessels to China, as well as South Korea, Japan and Taiwan.
Mr Zhang attacked the facility — and the one in Malaysia — as “violating the principle of optimising resource deployment”. He added, that “at present the existing fleet in the market is completely able to satisfy the iron ore shipping demand” and decried the “waste of resource” that the plan would bring about.
He also called into question Vale’s ability to run a fleet properly. “It is difficult for them to run ships as good as professional shipping companies and thus tend to arouse safety and environmental risks.”
But he reserved the strongest words about the plan, in his view, of Vale’s bid to control the economic equation of iron ore transport. “Vale holds the cargo itself,” Mr Zhang said, “and intends to control shipping tonnage. It is a matter of monopoly and unfair competition which not only harms the shipping interest of mainland China, but also that of South Korea, Japan and Taiwan.”
Vale has been quiet in response to the resistance from the CSA. It was reported that in September the company had approached shipowners about possible charters of the 400,000 dwt bulkers, or even sale and leaseback arrangements.
A Vale official told Lloyd’s List earlier this week: “We are declining to make any comment regarding this project.”
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