Sao Paulo, Brazil, 21 Dec – Brazilian mining group Vale has sold four of 19 super cargo ships ordered by the previous board of directors from South Korean and Chinese shipyards to Asian shipping companies, Brazilian financial newspaper Valor Económico said citing a source from the group.
The group intends put the remaining 15 ships on sale this year by associating them to long-term use contracts, a strategy that the new board of directors approved last week, according to the cited source.
The economic climate of 2008 led then chairman Roger Agnelli to find a logistical alternative to compete in the global iron ore market, by reducing volatility in shipping prices.
Initially 12 ships were ordered from China for US$1.6 billion and, a little later, seven more from South Korea, totalling 19, as well as chartering 16 super cargo ships from South Korean shipping companies.
Vale’s fleet totalled 35 Very Large Ore Carriers (VLOC) that carry 400,000 tons of ore and are the largest ore cargo ships in the world.
Vale, which is China largest iron ore supplier (it sells 45 percent of total production to this market), has focused on Cost, Insurance and Freight (CIF) sales and has been successful.
However, it did not count in the mid-term on the return of the financial crisis, which has led to a global economic downturn, including in China, or with the fact that its Velomax (the name given to the super carriers) cannot enter Chinese ports to unload.
The Vale group has been using its Velomax ships on routes between Brazil and Europe and the Middle East. (macauhub)