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Dalian to ‘Seriously Consider’ Vale-Ship Protests, Owners Say

Jan. 4 (Bloomberg) -- China’s main shipowners association said Dalian Port agreed to “seriously consider” its objections after the harbor last week became the first in the country to handle a very large ore carrier for Vale SA.

The China Shipowners Association has reiterated opposition to Vale’s use of the vessels on Chinese routes in letters to Dalian Port and the government, Executive Vice Chairman Zhang Shouguo said by phone today. Dalian said it would “seriously consider” the protest, he said. Zhu Hongbo, board secretary at the harbor’s listed unit, Dalian Port PDA Co., declined to comment.

The shipowners have objected to Vale’s plans to build up a fleet of 35 VLOCs because of concerns the vessels will worsen a capacity glut that has already depressed rates to unprofitable levels. The Brazilian miner is spending at least $8.1 billion on the shipping push as it seeks lower freight costs for shipments to China, its biggest market.

The 388,000-ton Berge Everest, operated by BW Group, arrived in Dalian on Dec. 28. It was fully loaded with iron ore from Brazil. The vessel is now heading for Singapore, according to ship-tracking data on the Bloomberg terminal.

BW Group will operate four of the so-called Valemax ships for Vale on long-term contracts. Rio de Janeiro-based Vale is buying another 19 and leasing a further 12.

The first of the ships to enter service was diverted to Italy from Dalian on its maiden voyage in June because of draft restrictions at the port and a request from a European customer, according to Vale.

To contact Bloomberg News staff for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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