Vale plans to build 400,000 deadweight-ton ships
Vale SA, the world’s largest iron-ore producer, is seeking to build ships with 400,000 deadweight tons capacity for its own fleet to serve the growing Chinese market and cut costs. Vale’s fleet has helped the Brazilian miner to reduce freight costs when shipping ore to Asia, Chief Financial Officer Fabio Barbosa told analysts today in Rio de Janeiro. The company’s own freight costs are “well below” spot prices, he said, without elaborating.
Commercial freight rates from Vale’s Brazilian ports to China, the world’s biggest iron-ore consumer, are double rates paid by its competitors BHP Billiton Plc and Rio Tinto Group from Australia to China, because of the greater distance.
“We’re overcoming our logistics difficulties” in shipping ore to Asia, Barbosa said. “We’re seeking to reduce our exposure to spot market freights, which are extremely volatile.”
Since the beginning of the global financial crisis, Vale has bought 15 used ships and ordered 20 new ones to save on costs, the company said last week.
Vale shipped a record 35.6 million tons of the steelmaking ingredient to China in the second quarter, 42 percent more than a year earlier, Barbosa said.
Commercial freight rates from Vale’s Brazilian ports to China, the world’s biggest iron-ore consumer, are double rates paid by its competitors BHP Billiton Plc and Rio Tinto Group from Australia to China, because of the greater distance.
“We’re overcoming our logistics difficulties” in shipping ore to Asia, Barbosa said. “We’re seeking to reduce our exposure to spot market freights, which are extremely volatile.”
Since the beginning of the global financial crisis, Vale has bought 15 used ships and ordered 20 new ones to save on costs, the company said last week.
Vale shipped a record 35.6 million tons of the steelmaking ingredient to China in the second quarter, 42 percent more than a year earlier, Barbosa said.