Tuesday, July 5, 2011

Vale new giant ships to be built in China and Korea

8 new Valemaxes being built in China, South Korea

* Brazilian shipyards busy with orders for Petrobas, other companies

* Vale shipping strategy aims at cutting freight to China-Cavalcanti

LONDON, July 5 (Reuters) - Brazilian mining giant Vale will have China and South Korea build its new giant bulk carriers as domestic Brazilian shipyards do not have capacity to take the order, Vale chief financial officer said on Tuesday.

"So far we have booked 19 Valemaxes," Guilherme Cavalcanti told Reuters. "The first was already delivered and there are 18 more to come. They are being produced in China and Korea."

Although Vale looked at Brazilian shipyards to have the ships built, they were already busy with orders from Petrobas or other companies, a spokeswoman for Vale said.

Vale's shipping strategy mainly targets cutting freight costs from Brazil to top iron ore importer China, in order to boost competitiveness against rival diversified miners Rio Tinto (Berlin: CRA1.BE - news) and BHP Billiton (Hamburg: BHP1.HM - news) .

"Our target is to keep the difference in transport costs from Brazil to China compared with Australia to China low," Cavalacanti said.

Vale rerouted its China-bound first giant bulk carrier Vale Brasil to Italy on its maiden voyage.

Vale said its first 400,000 tonnes ship Vale Brasil was diverted to Italy for commercial, not political, reasons and to allow time to finalise talks for future port deals. ID:nLDE75L128]

There had been speculation among traders that the Vale Brasil was unable to berth at Dalian, China, due to pressure from China's domestic steel industry who had urged the authorities to protect their commercial interests.

Vale said at the time that some details were yet to be finalised with port authorities of Dalian to grant Vale Brasil access to the port, adding that Taranto was the first and so far only port to have granted formal access for the vessel.

Vale said it expected Vale China, the first vessel of the Valemax class totally produced in China and financed by Chinese financial institutions, to have a Chinese port as its first destination.

No comments: