The world’s largest iron-ore producer plans to double its shipments in the next five years to China, where it now supplies 12 percent to 14 percent of the country’s iron ore consumption, said Jose Carlos Martins, Vale’s head of ferrous metals.
While the Rio de Janeiro-based company’s iron-ore output so far this year is ahead of expectations, it’s maintaining its 2014 output target of 312 million metric tons as operations could still be affected by rains or conflicts with Brazil’s indigenous population, Martins told reporters in Rio yesterday.
“Our expectation is that we can really manage to present the market a performance a bit better than promised,” Martins said. “Now, our activity is very much subject to phenomenons like weather.”
Vale is studying shipping options including buying extra vessels or, preferably, leasing carriers, he said.
“With the increase in export volume, we will need to hire more ships or buy them, whatever is more efficient from a financial point of view,” Martins said. “Our preference is to lease.”
Vale in 2011 started operating Valemax vessels, the world’s biggest iron-ore carrier with the capacity to carry as much as 400,000 metric tons, to reduce shipping costs to Asia and improve its position against Australian rivals. The company has yet to convince China’s authorities to allow the vessels to anchor at Chinese ports because of safety concerns, Chief Executive Officer Murilo Ferreira told reporters July 31 on a conference call.
The company is building up iron-ore inventories at its $1.4 billion Teluk Rubiah distribution center in Malaysia, where it’s starting to operate a storage yard and maritime terminal for Valemax vessels. Vale expects to have 3 million to 4 million tons of the steelmaking ingredient stored at the center, Martins said yesterday.
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