Vale SA, the world’s largest iron-ore producer, is set to take delivery of a ship that will help the company bypass the exclusion from Chinese ports of its biggest vessels hauling the commodity.
The Ore Fabrica, a raw-materials carrier that’s been converted to a so-called transshipment vessel, departed the shipyard this morning for delivery to Vale, Jiangsu Xinrong Shipyard Co., which did the conversion, said in an e-mail today. The giant ship has at least five cranes painted yellow on the deck, according to pictures sent by the shipbuilder.
It will be the largest global floating transfer station, Robert Willmington, a spokesman for Redhill, England-based IHS Fairplay, a provider of shipping data, said by e-mail.
China is excluding Vale’s five largest ships, the world’s biggest carriers of dry-bulk commodities, because they lack port-entry permits, Jose Carlos Martins, head of iron ore and strategy, said in December. The Rio de Janeiro-based company planned to transfer ore to smaller ships from the so-called valemax vessels for delivery elsewhere, he said.
Vale is spending more than $8 billion to operate a fleet of 35 valemaxes in an effort to gain more control of freight costs to its fastest-growing market in Asia. Chinese shipowners opposed the vessels’ introduction on concern it would worsen a capacity glut and plunging rates. China is the biggest global user of iron ore, a steelmaking ingredient.
The transshipment operations would be based at Subic Bay in the Philippines, Martins said. The Ore Fabrica is destined for the port along with the ore carriers Vale Brasil and Vale China, ship-tracking data compiled by Bloomberg show. The vessels are scheduled to arrive on Feb. 2, Feb. 12 and Feb. 22, respectively, according to the data.
Vale will pay the shipyard nearly 100 million yuan for the conversion, a project manager surnamed Ji at Jiangsu Xinrong said today. He declined to provide his full name, citing company policy.
The Ore Fabrica’s conversion started in August, according to a note on the website of Jiangsu Xinrong. That was six weeks after Vale Brasil, Vale’s first valemax, diverted to Italy on its maiden voyage from the original destination of Dalian in China.
The conversion was the second for the Ore Fabrica, which was previously altered by Vale to an ore carrier from a tanker, IHS Fairplay data show.
The three Chinese ports that Vale has said can accommodate the valemaxes have so far failed to handle any of the ships. The vessels, each able to carry 400,000 metric tons of iron ore, are about twice the size of the capesize ships generally used to haul cargoes to Asia from Brazil, the second-largest global exporter of the commodity after Australia.
The ships’ exclusion from Chinese ports is a “technical issue” and has no connection to political influence, Vale’s Martins said last month.