Bloomberg quoted Alphabulk as saying that Vale SA, the world’s biggest iron ore exporter, may have paid about USD 158 million more for shipping in the past 19 months by using the largest available carriers rather than smaller vessels.
The Paris based maritime research company said that the figure reflects the difference between how much it cost the company to use Valemaxes relative to Capesizes. Costs for the bigger ships were higher because of a slump in Capesize rates and restrictions that prevent Valemaxes berthing at ports in China, the largest iron ore buyer.
The company is spending USD 2.3 billion on 19 Valemaxes in a strategy to manage its shipping costs to Asia. Rio de Janeiro based Vale also has a 25 year contract valued at USD 5.84 billion with STX Pan Ocean Company, a Seoul based shipping firm, to haul its ore from Brazil. STX has ordered eight Valemaxes.
Alphabulk said that the first Valemax started trading in May 2011 and there are now 21 in the fleet, hauling a total of 17.1 million tonne of ore. That’s the equivalent of 100 voyages on Capesizes. About 12.5% of iron ore from Brazil will be shipped on Valemaxes by the time all the ships ordered are operational next year.
It said that Vale would save USD 380 million a year, or USD 7 for each ton of ore carried, if it replaced the Valemax fleet with ships half the size, which would be able to call at 80% of all ports. The calculation assumes that China’s curbs on Valemaxes remain in place.
