Shipowners are running their capesize bulk carriers in the Pacific basin while the coronavirus pandemic could potentially impact Brazil’s iron ore supply. Brazil’s iron ore mining giant Vale’s production has diminished in mining provinces. Consequently, China shifted to Australia for the required iron ore. Iron ore miner Vale should shift to regular production levels to maintain capesize market. Most of capesize bulk carriers could not get iron ore from Vale and have been ballasting to the Far East. Currently, capesize bulk carriers average time-charter rate for the China-Japan transpacific roundtrip voyage is around $4,500 per day. On the other hand, capesize bulk carriers average time-charter rate for the China-Brazil leg is around $3,100 per day. If coronavirus pandemic proceeds affecting Vale’s iron ore exports, capesize rates will remain low. Currently, capesize bulk carriers are operating below operating costs. 27-May-2020
The collapse of a Vale-owned dam in Brazil on 25 January 2019 may cause further pain for a dry bulk sector. Fiejao iron ore mine incident at Vale Brazil may lessen iron ore trade throughout the entire segment by 1%. On January 25, Bela Horizonte dam which was used for holding wastewater and mud from the Fiejao iron ore mine exploded and 34 people died. Up to now, more than 300 people were missing. Vale incident will affect the entire dry bulk sector which has already deeply affected by slowing the Chinese economy. This is the second such Vale disaster in 3 years.
In 2015, Vale/BHP-owned Samarco mine collapsed and killed 19 people. Bela Horizonte dam incident could result in a decline of more than 6% of Vale’s iron ore production and consequently have a meaningful negative impact on overall dry bulk shipping demand, particularly capesize sector. After the Bela Horizonte dam incident, Brazilian authorities have frozen Vale’s $1.3 billion cash in Vale banks.
In 2015, the Samarco tragedy cost Vale $5 billion and Samarco mine is still offline. In 2018, iron ore trade made up 28% of total seaborne dry bulk trade (1.47 billion tonnes). Iron ore sector’s tonne-mile growth for the entire 2019 may be less than 2% while the overall fleet is expected to jump 5% in 2019. If Bela Horizonte dam tragedy substantially affects iron ore exports, ship supply would be likely to exceed ship demand in 2019. Star Bulk Carriers, Golden Ocean, and Genco Shipping & Trading is going to feel the pain. 27-January-2019
Vale International head of shipping department Gurinder Singh has been quietly replaced. No explanation of the move has yet been made by Vale International. Shifting chartering head means for Vale’s massive newbuilding programme at a time when the ore is cheap and Vale’s long-term charter rates are far above the available market.
Vale is understood to be paying about $12 per tonne to the Chinese owners who have taken on its Valemaxes, while Vale could get its iron ore shipped at half that rate in the current depressed market. On the other hand, observers point out that the current market might not be quite down to those levels if the Valemax fleet had never been built.
Gurinder Singh’s sudden departure may be a sign of Vale CEO Murilo Ferreira’s souring on the Valemax project at a time when locked-in, long-term freight rates are costing the company millions per voyage over the current dry bulk market. 31-January-2016
Brazilian miner Vale has sent 1986 built VLOC (Very Large Ore Carrier) 200K DWT M/V Ore Timbopeba for around $267 per ldt to Bangladesh scrapyard. M/V Ore Timbopeba was sold with 1,000 tons of fuel onboard. Vale has 18 other owned vessels in its fleet excluding 35 valemax bulk carriers. 35 valemax bulk carriers could have been sold in leaseback deals. 27-January-2016
Vale Ex CEO Roger Agnelli died in an airplane crash in Brazil. He worked hard to create the world’s biggest mining companies and planed Valemax bulkers 400.000 DWT. Roger Agnelli’s wife and 2 children were killed. His plane hit houses in Sao Paulo Brazil on Saturday. In 2006, Roger Agnelli largest-ever purchase for $18 billion Canadian mining outfit Inco. Inco has the world’s largest nickel reserves. 4-April-2016