Three fat ladies

Columbus, the AM's new source in Subic Bay, has sent the photos below of BW Bulk's 388,00 DWT 'Berge Aconcagua' (red hull), 'Ore Fabrica' (black hull) and the 203,000 DWT 'China Steel Team' grey hull rafted together in the inner harbour.

Th tug 'Perseverance' is standing by the trio as they swing around Ore Fabrica's anchor.

Berge Aconcagua must have part discharged in Japan (Oita) and over-carried at least a Cape's worth for this trans-shipment.

AM

Vale's letter to Lloyd List on ValeMax

In response to a comment on yesterday's post about Vale's charm offensive in China, here's the letter to Lloyd's List.

AM

388,000 DWT 'Berge Aconcagua', Oita Japan

Lloyd's List: Valemax issues clouded by misinformation

Monday 25 June 2012, 10:28

From João Mendes Faria

SIR, I refer to your article “Vale urges China to lift valemax ban” (Lloyd’s List, June 21) and would like to make the following clarifications.

First, Vale has never challenged the Chinese government ban on valemaxes berthing at its ports. We have observed that there has been a great deal of misinformation and speculation in both Chinese and international media. We have recently made efforts to provide factual information to interested parties and different government departments to address the mistaken information and claims widely circulated.

Second, the iron ore carried to Asia via valemax can be transhipped to Chinese or other Asian ports via our transhipment stations. A second floating transhipment station in Asia in early 2013 will double the transhipment capacity from the existing FTS in the Philippines up to 30m tons per year. At the end of 2013 our Malaysian transhipment centre brings the total annual transhipment capacity to 60m tons. Besides those locations the valemax fleet of 35 vessels can regular berth in Rotterdam, Taranto, Sohar in Oman and Oita in Japan. The whole fleet of 35 valemaxes, when ready by the end of 2013, will be able to transport around 55m tons per year.

Third, it is true that we have been in discussions with some Chinese shipowners for each to buy some of the 19 valemaxes which are currently to be owned by Vale. Due to mutual confidentially, we have never named any of the companies we have been in discussions with. It is also true that these discussions have slowed since the issuance of the Ministry of Transport Circular 13 in January. This is completely understandable. Chinese shipowners hope to understand the implications of the barring of the vessels, as we do.

Fourth, Vale and Cosco have had a long-term co-operative relationship for years and Cosco-operated vessels have regularly been carrying cargoes from our Brazilian ports. In the past we proposed to Cosco that they build and operate valemax vessels under long-term charter with Vale. Cosco chose not to, for their own reasons. We fully respect their decision.

Fifth, Vale is not in a hurry for the Chinese government to reopen access to its ports for the valemax ships. We understand that much misinformation must still be clarified.

Although we are not in a rush for Chinese berthing restrictions on valemax to be lifted, we do hope that it can be sooner rather than later. This is simply because the valemax can bring benefits to different Chinese players. Steel mills and iron ore traders will benefit by a more competitive iron ore market. Iron ore ports can double their throughput. This does not even mention the environmental benefits of 35% CO2 reduction per ton of iron ore compared to capesize.

Valemaxes are part of a long-term strategy to enhance market competitiveness in Asia and will be chartered for 25 years.

We are patiently engaging different Chinese stakeholders and agencies and have a high level of confidence that the eventual decisions that will be made will consider all aspects around the issues and the overall benefits to China and Chinese markets.

João Mendes Faria

Global Business Development Director

Vale

Vale's Chinese charm offensive

Ore giant Vale are currently running a 'charm offensive' - a book in English and Chinese on the technical excellence of the Valemax vessels, Letters to the Editor, media commentary...

Dance of the giants, Subic Bay AIS

Despite of (or maybe because of) China's stonewalling, the Subic Bay operation seems to be back in business. Today's screenshot from AIS shows 'Berge Aconcagua'  and 'China Steel Team' being manouevred around 'Ore Fabrica'. Not sure what 'Aconcagua is doing is Subic as she has just broken records for discharging in Oita, Japan. Maybe she has over-carried some cargo to test Fabrica's transfer system?

Today's Op-Ed from Lloyd's List

The lowdown on Valemaxes

Brazilian iron ore giant’s book makes the case for 400,000 dwt ships

Tom Leander

Wednesday 27 June 2012

VALEMAX vessels are banned from China — this everyone knows.

But the facts underlying the ban, a straightforward account of what happened, how it came to pass and its status now have been a matter of detective work and speculation in the press.

All parties involved — the government, stakeholders in China and the government departments with the final say on approving Vale’s big ships — have offered only limited information regarding their strategy and decisions.

Vale has now changed that with a remarkable document describing its valemax strategy, as much as you would ever want to know about the 400,000 dwt ships, why Vale invested in them and how it believes the ships will benefit the Chinese economy.

If this were Washington rather than Beijing, the brochure — really a small book running to 75 pages — would be regarded as a lobbying document.

Its aim is to persuade, but unlike some position pieces it is also a mine of information and deploys a fair and open style, making a best case while weighing up the arguments against its cause without rancour.

The booklet is published in English and Chinese and seems more aimed to readers in the transport, iron ore trading and steelmaking constituencies in China than at an English-language audience.

It also offers clarity for those trying to understand the point of view of the Chinese government, publishing translations of the various circulars by the Ministry of Transport concerning the valemax ships.

One of the interesting approaches of the booklet is to add nuance to English readers’ understanding of the Chinese scene. So often seen as a monolith in the west, China’s authorities have often very strong differences in point of view and must respond to the constituencies they govern.

The wording of the valemax ban — in the view of this newspaper, though not the view of the valemax book — was ambiguous enough to reflect a certain reluctance to impose an absolute ban.

Our interpretation is that this is because China’s Ministry of Transport represents more than the shipowners that took exception to the valemax ships, arguing against their safety and also that they would create a monopoly that would hurt the businesses of China’s shipowners.

In fact, the ministry represents diverse national interests and there are other constituencies in China — steel mill operators, port operators and iron ore traders — that see the ships not as a threat but as a potential boon.

The real business of the Ministry of Transport’s Circular 13 was to remove the “one-case-one” basis, in Vale’s translation, at local ports.

Ports were allowed to let valemax ships on a case-by-case assessment, with the ports later required to submit the reasoning behind the approval to the MoT.

Having had the case-by-case allowance withdrawn, ports must now wait for a blanket approval from the MoT — or a possible return to case-by-case status — before allowing the ships to enter.

The reason that the MoT offered was concern for safety. “Given that the safety of the operation of the super large vessels at ports is not optimistic …” the circular reads in part. But the “given” is never explained.

It is clear where Vale stands, but it is refreshing to see it spelled out so plainly. “Vale was surprised at the MoT Circular 13 because it ended its policy, which allowed ports to decide the safety of berthing larger vessel types,” Vale writes. “Vale was surprised that safety was the main concern of Circular 13 …”

“It surprises us too,” Vale goes on to say, “that the valemax ships designed in China, in consultation with Chinese iron ore ports, built and launched from three Chinese shipyards, Rongsheng, Bohai and STX Dalian, are now restricted”.

The Brazilian iron ore giant makes its case that the ships have safety advantages over conventional bulkers. They require “60% fewer port manoeuvrings for the same amount of ore delivered”.

This cuts back on port congestion and reduces the risk of an accident. The hold design, Vale says, minimises the movement of iron ore, which makes the ships more stable. Fully loaded, valemaxes have a draft of 23 m, which Vale says is similar to other dry bulk ships berthing in China.

Vale also notes that “if required, by some ports, lightering in transhipment stations can reduce the draft of valemaxes”.

The Brazilian company then says: “China’s main ports are world leaders in design and are regularly receiving container and oil tanker ships larger than valemax ships.”

It goes on to say that: “Chinese ports were consulted during the design of the valemax ships, signed co-operation memoranda of understanding as early as 2009 and are among the first in the world well prepared for valemax ships. Soon ports in other countries such as Korea and Japan will catch up, [as] the European ports already did.”

Vale takes a dim view of the consequences of persisting with the ban at a time when China’s economy has slowed to its lowest rate of growth in many years. The ban, it concludes, will hurt China’s ports and could compromise China’s steel industry.

AM