23-03-2016

Vale Signs Iron Ore Shipping Deal To China for 16 million mt/year

vale

Top iron ore miner Vale has secured another major iron ore shipment deal into China for 16 million mt/year starting in the first half of 2018, it said.

The 27-year contract of affreightment is with China Merchants Energy Shipping.

It comes three days after Vale entered a shipping deal with the same terms with China COSCO Shipping.

Vale CEO Murilo Ferreira said the two contracts of affreightment reflect the company’s unwavering focus on China as its core market.

A Singapore-based bulk shipment service provider source said the timing makes sense because freight rates are low while the shipping market is oversupplied and shippers are competing aggressively to secure cargoes.

In September, a Vale marketing and sales official disclosed a plan to set up iron ore distribution centers at one or more Chinese ports to be closer to Asian customers in China, Japan and South Korea.

The moves are part of its efforts to sharpen its competitiveness against other Australian miners in the Chinese market, which is expected to remain the core demand center for foreseeable future.

Vale produced 345.9 million mt of iron ore in 2015, leaving it as world’s top iron ore producer. It aims to expand its iron ore capacity to 459 million mt/year by 2019.

Source: Platts

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