Vale Mining

The Brazilian mining giant Vale surpassed its iron ore production forecasts for 2023, achieving an uncommon feat. This remarkable performance, highlighted by a strong year-end surge, saw Vale outdo its projected figures. As a key player in the global iron ore market, Vale’s operations significantly influence the maritime bulk carrier sector, with the company being responsible for about 20% of the total iron ore transported by sea. In 2023, Vale produced 321.2 million tonnes of iron ore, considerably exceeding its guidance of 315 million tonnes, representing a 4.3% increase. 3-February-2024


Shandong Shipping has entered into an agreement with Qingdao Beihai Shipbuilding to construct four 325,000 dwt methanol dual-fuel very large ore carriers (VLOCs). These colossal carriers, measuring 340 meters in length, will be employed to transport iron ore from Brazil for Vale. Innovatively designed in China, these bulk carriers are equipped with wind rotors and facilities for high-voltage shore power connection. Notably, this new generation of methanol dual-fuel VLOCs boasts a shallower draft compared to existing models while retaining the same cargo capacity, thereby improving their compatibility with various ports. Beihai Shipbuilding, located in northeastern China, has recently solidified its reputation as the leading builder of newcastlemax bulk carriers and very large ore carriers (VLOCs) globally. 7-December-2023


Vale, the Brazilian mining powerhouse, has recently embarked on its first iron ore voyage using a blend of biofuels, in collaboration with Lubeck-based shipowner and operator Oldendorff Carriers. This initiative represents a significant step in Vale’s journey towards more sustainable shipping practices. The voyage was conducted using the Oldendorff Carriers’ 2016 built newcastlemax bulk carrier 209K DWT MV Hinrich Oldendorff. MV Hinrich Oldendorff, loaded with iron ore at Guaiba in Brazil, was powered for this journey by a mixture of biofuels derived from residual cooking oil, marking a departure from conventional bunker fuels. Brazil’s iron ore mining giant Vale, headquartered in Rio de Janeiro, undertook this project in partnership with the German bulker operator Oldendorff Carriers. This trial voyage is a part of Vale’s broader Ecoshipping program, which aims to test and implement green technologies in maritime operations. The Ecoshipping program has already explored various sustainable solutions, including methanol fuel, wind propulsion, and air lubrication technologies. This biofuel-powered voyage is particularly significant for Vale, as it aligns with its commitment to environmental sustainability, especially in the crucial Brazil-to-China iron ore trade route. By integrating biofuels into its operations, Vale is showcasing its commitment to reducing the environmental impact of its shipping activities. 1-December-2023


Brazilian mining giant Vale has made a significant move towards reducing emissions in its shipping operations by securing the world’s largest ore carrier for wind-assisted propulsion. 2012-built valemax bulk carrier 400K DWT MV Sohar Max owned by Oman-based shipowner and operator Asyad and under a long-term charter with Vale, will be equipped with five 35-meter-tall rotor sails provided by British supplier Anemoi Marine Technologies. These cylindrical sails will be installed using Anemoi Marine Technologies’ folding deployment system, allowing them to be folded vertically when not in use to minimize interference with air draught and cargo handling operations. This retrofit project, certified by LR (Lloyd Register), is expected to be completed in the Q2 2024. It is anticipated to result in fuel savings of 6% and a reduction of up to 3,000 tons of CO2 equivalent emissions per ship per year. Anemoi Marine Technologies has been collaborating with Brazilian mining giant Vale on solutions for its bulk carriers for several years. This initiative follows similar efforts within the industry, such as Berge Bulk retrofitting its MV Berge Neblina with four folding rotor sails and Brazilian mining giant Vale working with Mitsui OSK Lines (MOL) to add Norsepower rotor sails to two bulk carriers. Wind energy is becoming increasingly central to Brazilian mining giant Vale’s strategy for decarbonizing the maritime transportation of iron ore. 8-November-2023


On Wednesday, October 17, 2023, the strong demand for capesize bulkers continued to rise steadily, reaching its highest level in 17 months. Analysts attribute this surge to the limited availability of vessels in the Atlantic basin. According to data from the Baltic Exchange, the Capesize 5TC index increased by 2.4% on that day, reaching a daily rate of $31,100. This marks the second consecutive day above the $30,000-per-day threshold and represents a significant increase from the low point of $8,266 observed in September. The last time the 5TC surpassed $30,000 per day was in late May 2022. This trend is particularly evident in the Atlantic basin, where rates have soared to nearly $42,000 per day, while the Pacific basin lags behind at $26,000 per day. Despite robust shipping volumes, shipbrokers attribute the rate surge in the Atlantic to constrained fleet capacity. For example, the average spot rate for the transatlantic roundtrip C8 voyage between Brazil and Europe has surged by 700% since early September 2023, reaching nearly $41,800 per day on Wednesday. Similarly, the transatlantic roundtrip C14 voyage between Brazil and China has seen a 146% improvement in the same period, reaching almost $23,300 per day on Wednesday. Even the average spot rate for the transatlantic roundtrip C10 voyage between Australia and China, though slightly above $26,000 per day, has climbed by 143% since early September 2023, reaching $26,200 per day on that Wednesday. On October 17, 2023, Rio Tinto, the Anglo-Australian minerals and mining giant, secured a capesize bulk carrier at a rate of $11.15 per tonne to transport 170,000 metric tonnes of iron ore from Dampier to Qingdao. Loading for this shipment is scheduled to take place from November 1st to 3rd, 2023. The Atlantic basin’s share of the global capesize fleet stood at 21% as of the last week, down from 24% in late September 2023. This limited availability has compelled charterers to pay higher rates to attract ballasting ships from the Far East. Additionally, increasing port congestion has resulted in an additional 1% of the capesize and panamax bulk carriers being tied up in the past week. Furthermore, Brazilian iron ore giant Vale reported a 6.6% increase in sales for the third quarter of 2023 compared to the same period in 2022. 17-October-2023


Brazil’s iron ore mining giant Vale has chosen four distinguished Asian maritime enterprises for its novel cadre of Guaibamax Ore Carriers. In its tender, Vale is in pursuit of as many as 12 new constructions, encompassing optional ships. Vale intends to commission up to 12 Guaibamax Ore Carriers that possess the capability to operate on either methanol or traditional marine fuel. Progressing in its quest for the next-gen ore carrier, Brazil’s iron ore mining giant Vale has handpicked four illustrious corporations from the Asian continent for collaboration. Trusted shipbuilding informants have conveyed that this mining titan has endorsed South Korea’s HMM and Pan Ocean, alongside China’s Cosco Shipping Bulk and China Merchants Energy Shipping. Vale’s Ship Chartering Department asks Guaibamax Ore Carriers to be equipped with energy-efficiency technologies. Brazil’s iron ore mining giant Vale’s Ship Chartering Department plans next generation 325K DWT Guaibamax Ore Carriers will be able to run on both methanol and conventional bunkers. 6-September-2023


Brazil’s iron ore mining giant Vale and Anglo-Australian minerals and mining giant Rio Tinto produced more iron ore, which capesize bulk carriers carry to China, in Q1 2023 than they did in Q1 2022. Brazilian mining behemoth Vale extracted 79.3 million metric tonnes of iron ore in Q1 2023, marking an 11% surge from Q1 2022. Vale, the Brazilian titan of iron ore mining, credited its augmented yield to enhanced operational efficiency at its Serra Sul mine, which boasts an unparalleled annual production of 90 million metric tonnes of iron ore, and reduced precipitation in the state of Minas Gerais. Vale and Anglo-Australian minerals and mining giant Rio Tinto has increased their iron ore production, fueled by the recovery of China’s property sector, thereby strengthening their market outlook. Vale’s anticipated achievement of its full-year production targets is poised to yield favorable outcomes for capesize bulk carriers. 21-April-2023


Brazil’s iron ore mining giant Vale is requesting shipowners and ship operators to offer bids for COA (Contracts of Affreightment) on the next generation of methanol-fuelled Guaibamax Ore Carriers. Brazil’s iron ore mining giant Vale’s Ship Chartering Department has launched an effort that could result in the construction of methanol-fuelled Guaibamax Ore Carriers. Furthermore, Vale’s Ship Chartering Department asks Guaibamax Ore Carriers to be equipped with energy-efficiency technologies that comprise rotor sails. Brazil’s iron ore mining giant Vale’s Ship Chartering Department plans next generation 325K DWT Guaibamax Ore Carriers will be able to run on both methanol and conventional bunkers. 24 December 2022


Brazil’s iron ore mining giant Vale and Silverstream Technologies outfitted 2021 built Very Large Ore Carrier (VLOC) 325K DWT MV Sea Victoria with an air cushion to reduce bunker use and emissions. MV Sea Victoria has completed its first voyage. Silverstream Technologies’ air lubrication system generates a carpet of bubbles to decrease friction between the hull and sea. Silverstream Technologies’ air lubrication system will be evaluated over one year. Brazil’s iron ore mining giant Vale and Silverstream Technologies expect a bunker reduction of around 5% to 8% per bulk carrier. Silverstream Technologies installed ten compressors on MV Sea Victoria to send air to 20 bubble-producing devices under the hull. Silverstream Technologies. Silverstream Technologies’ air lubrication system costs around $5.5 per vessel. Silverstream Technologies’ air lubrication system is easy to install on any type of ship. Brazil’s iron ore mining giant Vale controls more than 100 bulk carriers and more installations could be decided within 2022. Vale’s ships are on long-term periods, but the Vale has paid the complete cost of the pilot installations of Silverstream Technologies’ air lubrication system as well as the Norsepower rotor sails it has fitted on another VLOC (Very Large Ore Carrier) newbuilding. MV Sea Victoria air lubrication system installation took 35 days at the shipyard in China. Vale has aggressive goals to lower emissions across the company. At the beginning of 2021, Vale signed an MOU (Memorandum of Understanding) with 23 organizations to investigate the application of ammonia as an alternative marine fuel. 18-August-2021


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


Vale’s strategy to significantly reduce its Very Large Ore Carrier (VLOC) fleet is anticipated to positively affect bulk carrier rates. Currently operating over 50 VLOCs, the Brazilian iron-ore behemoth has announced plans to phase out or replace 25 of these converted Very Large Ore Carriers (VLOCs), adopting a new risk management strategy as disclosed in its Q1 2020 financial report. This move, aimed at decommissioning vessels primarily converted from Very Large Crude Carriers (VLCCs) in the 1990s, is expected to lead to their scrapping, according to industry analysts. The decision marks a shift in Vale’s logistical operations, given its history of owning bulk carriers until 2019 and its significant control over a fleet of large-sized ore carriers, including the 400K valemax bulk carriers. Although specifics on the ships’ release timeline were not provided, this initiative aligns with the need for a refreshed fleet strategy, especially in the wake of Polaris Shipping’s consideration to sell up to 10 converted ore carriers chartered to Vale. Analysts predict that the removal of these 25 Very Large Ore Carriers (VLOCs) from Vale’s fleet will tighten market supply, thereby potentially elevating bulk carrier rates. With 1,827 capesize bulk carriers available to absorb the demand, the market is poised for rate improvements, especially with expectations of increased iron ore exports and a declining order book. This scenario is further supported by anticipated economic stimulus measures driving demand for high-quality iron and bulk commodities, suggesting a favorable supply-demand trajectory. Vale’s revised 2020 iron ore production guidance—lowered to a maximum of 330 million tonnes from 355 million tonnes due to the coronavirus pandemic—reflects ongoing adjustments within the company following the tragic dam disaster in January 2019. The impact of this event continues to influence Vale’s operational and strategic decisions, including the potential for an increased number of Very Large Ore Carriers (VLOCs) being sent for recycling. The announcement of Vale’s first-quarter profit of $239 million, a significant turnaround from the previous year’s $1.64 billion loss, coincides with the positive outlook on the dry bulk market’s future. The phase-out of these 25 Very Large Ore Carriers (VLOCs), with several already sold or idle, is seen as a constructive development for the industry, potentially leading to enhanced carrier rates and market dynamics. This development, alongside the daily fluctuations in capesize bulk carrier rates, underscores the evolving nature of the dry bulk shipping market. 28-April-2020


Vale is taking a significant step in its fleet management by planning to eliminate up to 25 converted Very Large Ore Carriers (VLOCs) as part of a novel risk management strategy. This decision, aimed at enhancing operational safety and efficiency, involves either the early termination or modification of existing contracts for these vessels, though specific details about the ships or the timeline for these changes have not been provided. This move comes in the wake of Polaris Shipping’s consideration to sell up to 10 converted ore carriers currently under contract with Vale, indicating a shift towards newer, chartered-in bulk carriers and newly ordered ships from Polaris, motivated by both high fuel costs under the new IMO 2020 regulations and safety considerations. Vale’s initiative to phase out these converted Very Large Ore Carriers (VLOCs), originally built in the early ’90s, follows recent safety incidents, including the tragic sinking of the MV Stellar Daisy in 2017, which resulted in the loss of 22 crew members. Additionally, the MV Stellar Banner experienced a grounding incident in February after departing from a Brazilian terminal, prompting Vale to assist in the operational and preventive efforts to remove the iron ore cargo from the ship. These fleet adjustments were announced alongside Vale’s Q1 results, which fell below expectations. The company also revised its 2020 capital expenditure forecast downwards from $5 billion to $4.6 billion due to the coronavirus pandemic, which has impacted construction and maintenance work. Vale noted the potential for further capital spending revisions, emphasizing that any reductions are not savings but postponements to 2021. Moreover, Vale has delayed maintenance stoppages at several of its plants due to the pandemic, which is expected to affect production levels, particularly in its base metals operations. This is not the first instance Vale has highlighted the potential production and maintenance challenges posed by the coronavirus outbreak, having already adjusted its 2020 production forecasts for various divisions earlier in April. This series of strategic and precautionary measures underscores Vale’s response to both internal safety concerns and the broader impacts of the global health crisis on its operations. 27-April-2020


Vale has adjusted its iron ore production forecast for 2020 downwards in response to the coronavirus pandemic, but the mining giant’s output is still poised to positively influence the dry bulk market. Vale announced a revision of its top production estimate to 330 million tonnes from the previously projected 355 million tonnes, following a first-quarter decrease in volume by 18% to 59.6 million tonnes and a 7% drop in sales to 51.7 million tonnes. Despite this, Clarksons Platou Securities suggests that the revised guidance signals an anticipated increase in shipments for the rest of the year. This uptick, combined with heightened stimulus spending in China and seasonal activity boosts, is expected to foster a robust recovery in freight rates, according to managing director of research Frode Morkedal. The updated forecast still represents a notable rise, averaging at least 80 million tonnes per quarter for the year’s remainder, promising a beneficial effect on long-haul trade soon. Vale’s reduced projection marks an 8% increase from the 302 million tonnes recorded last year, following the dam disaster in January 2019, indicating a positive outlook for the iron ore trade and dry bulk shipping, as noted by Arctic Securities. Capesize bulk carrier rates, which averaged $26,000 per day in the second half of 2019, now hover around $10,000 per day, presenting potential for rate and earnings improvement. Additionally, China’s steel demand resurgence, as factories and projects resume, further supports this optimistic forecast. According to Fearnleys Securities, steel inventories in China have been decreasing since mid-March, with apparent steel demand returning to 2019 levels, fueled by infrastructure activities spurred by stimulus policies. Capesize bulk carrier rates have recently surpassed $10,000 per day, reaching a timecharter equivalent (TCE) rate of $11,123 per day on the Brazil-China route, indicating a bullish sentiment in the market. Vale’s recent charter of the MV Golden Champion for transporting iron ore across the Atlantic, along with rumored fixtures for Brazil to China shipments, underscores the dynamic and optimistic outlook for the dry bulk sector amidst ongoing challenges. 19-April-2020


Vale has adjusted its iron ore production expectations for 2020 downward, anticipating a greater impact from the coronavirus outbreak on its operations. The company now projects its iron ore output to be between 310 million and 330 million tonnes, a reduction from its earlier forecast of 340 million to 355 million tonnes. During the first quarter, Vale experienced an over 18% drop in iron ore production, totaling 59.6 million tonnes, and a nearly 7% decrease in sales, amounting to 51.7 million tonnes. Despite these challenges, Vale reported that its operations were relatively unaffected by the pandemic in the first quarter of 2020. However, it did temporarily suspend activities at the Teluk Rubiah Maritime Terminal in Malaysia, noting that this did not impact production levels. Vale has expressed concern that the pandemic’s effects on its operations could intensify in the future, particularly as Brazil intensifies its efforts to contain the virus. The company anticipates potential increases in absenteeism at its production sites if it becomes necessary to enhance safety measures to protect employees and if the contagion escalates in communities near its operations. Further restrictions by authorities to combat the pandemic could also affect production by limiting the minimum labor force available. Production at the Timbopeba mine in Ouro Preto, Minas Gerais, is now expected to resume in the second quarter of 2020, delayed from the first quarter. However, Vale is optimistic that these negative impacts will be mitigated by the expected gradual increase in production at the S11D mine, which is projected to reach close to 90 million tonnes in 2020. In comparison, Rio Tinto, another mining giant, reported a 16% reduction in iron ore shipments in the first quarter of 2020 compared to the last three months of 2019, shipping 72.9 million tonnes. Despite this decrease, shipments were 5% higher than in the first quarter of 2019. This improvement was attributed to a strong recovery across its network in March after the disruptions caused by tropical cyclone Damian in February 2020. Despite the challenges, demand for high-quality iron ores remained strong in the first quarter, according to Rio Tinto. 18-April-2020


Vale has sought assistance from Petrobras to address a potential oil leak from the MV Stellar Banner, operated by Polaris Shipping, now partially submerged off Brazil’s coast. The incident involving the 300K DWT iron ore carrier, which occurred 100 km from Maranhao near the Ponta da Madeira Maritime Terminal, prompted concerns of an environmental hazard. Vale requested Petrobras dispatch an oil spill recovery vessel to manage any potential spills from the vessel, stranded since early Wednesday. The Brazilian environmental authority has approved the mobilization of response vessels near Maranhao’s coast. Vale is also engaging salvage experts, supplementing Polaris Shipping’s efforts, to hasten the oil removal process and has called for offshore booms to contain possible spillage. Efforts to ensure personnel can be transported to the site are underway, following the safe evacuation of 20 crew members. Initial reports indicated the vessel might have a hull crack after sustaining bow damage upon departure. Polaris Shipping, listed as the owner and manager, clarified that the observed oil sheen was from dead oil on deck rather than a fuel tank leak, leading to the decision not to deploy an oil fence at that time. However, anti-pollution teams are on site as a precaution, monitoring the situation closely. A salvage team has been dispatched for a thorough assessment to ensure safe removal of the ship, prioritizing environmental protection. Polaris Shipping has dedicated resources to prevent environmental damage, asserting that the MV Stellar Banner’s cargo holds remain intact and the situation is under control. The ship is believed to have struck an unidentified shallow seabed upon leaving Maranhao, resulting in damage to some ballast water tanks and void spaces, with further assessments pending to ascertain the full extent of the damage. Polaris Shipping has countered claims of a leakage as speculative. 27-February-2020


The Brazilian mining corporation Vale has recently completed the sale of an aging ore carrier, the MV Ore Bayovar, built in 1998, for scrap, securing $8.15 million in a transaction that reflects a downturn in recycling prices. Shipbrokers have reported that Vale achieved a price of $372 per light displacement ton (lwt) for the 179K DWT vessel. The MV Ore Bayovar is scheduled for delivery to a facility that complies with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, indicating Vale’s commitment to responsible recycling practices. The sale price for the MV Ore Bayovar, which Vale acquired in April 2009 for $36.5 million, was initially estimated to be around $8 million. This transaction comes amid a fluctuating market for scrap metal, highlighted by Berge Bulk’s recent disposal of the Berge Bureya, a 289,000-dwt vessel built in 1993, for $410 per long ton deadweight (ldt) or $15.3 million, marking its third VLOC scrap sale of the year. However, these sales have occurred in a challenging market environment where domestic mills and re-rolling plants have been able to source heavy melting scrap from international suppliers at costs below what recyclers have been demanding, leading to a reevaluation of purchasing strategies. Scrap shipbroker Ed McIlvaney noted that the initial surge in scrap prices was short-lived due to a steady decline in domestic market offers to end receivers. The availability of cheaper foreign imports has introduced ongoing uncertainty in the market, which is expected to persist until such imports are no longer accessible. McIlvaney also remarked on the speculative nature of the price achieved by Berge Bulk and observed that the recent downturn has disadvantaged cash buyers. Even when considering the premium for green recycling in Hong Kong, the Vale transaction underscores a delivered price significantly below $400 per lwt, illustrating the current pressures within the recycling market. 27-October-2019


The capesize market is poised for a significant boost as Vale, the Brazilian mining powerhouse, plans to retrofit nearly 50 of its giant ore carriers with scrubbers by the end of the year, according to Braemar ACM. This move is set to reduce the availability of Very Large Ore Carriers (VLOCs) in the market temporarily, thereby supporting the already soaring capesize bulk carrier spot rates, which have reached their highest in five years. Vale’s ambitious plan includes fitting exhaust cleaning systems on all 48 carriers in its third-generation fleet and is considering the same for the 67 bulk carriers from the first and second generations of valemax bulk carriers. Braemar ACM highlighted the strategic timing, noting that the temporary withdrawal of Very Large Ore Carriers (VLOCs) for scrubber installation will positively impact the balance of the cape market. This adjustment comes at a time when iron ore shipment volumes have returned to levels seen in the latter half of the previous year, despite Vale’s production being constrained in its southern system. The capesize bulk carrier sector experienced a sluggish start in 2019, impacted by a slow Chinese economy and a dam collapse at Vale, which significantly cut into the miner’s export capabilities. However, with the Brucutu mine’s return to operation, capesize rates have surged to $32,000 per day, marking a dramatic increase from the $9,000 per day average in Q2 2019 and reaching the highest rates since 2014. Braemar ACM has documented that of the 119 Very Large Ore Carriers (VLOCs) delivered since 2008, which includes 61 valemax bulk carriers, only 19 have been equipped with scrubbers, with 10 of these being valemax bulk carriers. This includes both new buildings and retrofitted trading bulk carriers. The retrofitting process has taken longer than initially expected, averaging 28 days per bulk carrier, indicating that original estimates for downtime were overly optimistic. With a deadline by the end of this year to retrofit the remaining 48 bulk carriers, the industry faces a significant challenge. The estimated 1,200 trading days lost to retrofitting represent 15% of the available operating time, not accounting for additional delays such as diverting to shipyards. However, the impact of this capacity reduction may be somewhat mitigated by the delivery of new valemax bulk carriers and guaibamax bulk carriers, along with a substantial number of cape bulk carriers and newcastlemax bulk carriers still due for delivery this year. Shipowners are likely to be eager to launch these new vessels promptly to capitalize on the favorable market conditions, suggesting a dynamic period ahead for the capesize market as it adjusts to these developments. 18-July-2019


Vale has reported detecting movements at its Gongo Soco iron ore mine in Brazil, posing potential risks to a nearby dam. Although iron ore production at the Gongo Soco mine ceased in April 2016, Vale’s safety concerns are not expected to impact its production forecast or the outlook for the capesize market significantly. Structural issues at Vale’s Brazilian facilities, including a catastrophic dam collapse that resulted in over 300 fatalities, have already reduced the iron ore market by 40 million tonnes amid tensions between the US and China. Vibrations were observed at the mine’s North slope in Barao de Cocais, Minas Gerais, where operations have been halted since 2016. Vale indicated that any potential material displacement would likely be contained within the mine pit but could still affect the nearby Sul Superior tailings dam, located 1.5 km away. The company is assessing the potential impact on the dam’s structure while monitoring both the pit and the dam. In early February, more than 450 people were evacuated from the vicinity of the Sul Superior dam as a precaution, following a tragic incident two weeks prior when Vale’s Brumadinho tailings dam at the Feijao iron-ore mine collapsed, causing over 300 deaths. Following the disaster, Vale closed 50 tailings dams for inspection. Recently, Vale adjusted its 2019 iron ore and pellets sales forecast to the lower or mid-range of its 307 to 332 million tonnes projection. The initial production cuts impacted the capesize market significantly, depressing asset values, but current firm fixing rates for capesize bulk carriers suggest they might be undervalued, as indicated by Cleaves Securities. The firm predicts an exceptionally long expansionary cycle for the dry bulk market. Vale plans to decommission its remaining 10 inactive upstream tailings dams, including the Sul Superior dam, as part of its announced strategy in January. 16-May-2019


In the aftermath of the Brumadinho dam collapse, which resulted in numerous fatalities and significant disruptions to global trade, Vale has seen the temporary resignation of its CEO, Fabio Schvartsman. This incident underscores the ongoing challenges within the dry bulk shipping sector, which faces a prolonged period of market depression, potentially extending over a decade, even as Vale’s iron ore export volumes might recover and US-China trade tensions may ease. The return of spring in the Northern Hemisphere brings renewed discussions among dry bulk shipowners about the Baltic Dry Index, with sentiments varying from optimism to frustration. Shipowners, whether privately owned or state-operated, express dissatisfaction with the current market rewards, highlighting the crucial role of ocean shipping in global trade. The sector’s disappointment is amplified by a series of impediments including trade wars, extreme weather events, and the catastrophic impact of the Vale dam failure, all of which contribute to the depressed spot market despite a strong demand outlook. Shipowners argue that their fleet adjustments last year were prudent and did not contribute to the current market downturn, feeling unjustly penalized by the market’s irrationality. Some speculate that the Vale disaster’s impact is being exaggerated by charterers or speculators to manipulate earnings. However, the reality suggests that the dry bulk market’s challenges are deeply rooted in systemic issues, including a surplus of tonnage from ships delivered between 2010 and 2013, which will continue to affect the market for the foreseeable future. The problem is further compounded by a common bias among shipowners to focus on positive developments, leading to overordering of vessels. This tendency towards optimism has resulted in a tonnage surplus that is unlikely to be resolved until the current fleet ages out of the market. According to Liu Xunliang of the China Newbuilding Price Index, a meaningful recovery in the dry bulk sector is contingent upon the exit of this excess tonnage, potentially aligning with a future economic upturn. Until then, the industry must navigate through a prolonged period of adjustment and recalibration. 3-April-2019


A prominent Chinese shipowner has expressed optimism about the dry bulk market’s recovery, anticipating that Brazilian miner Vale will rebound from the setbacks caused by the Brumadinho dam disaster and subsequent mine closures. The unnamed state-owned company suggests that the market’s negative reaction has been disproportionate to the actual impact on export volumes and expects a resurgence as Brazilian exports increase throughout the year. Despite uncertainties about the extent of production cuts, Vale’s contractual obligations and penalties for failing to meet volume commitments make them hesitant to offer cargoes on the spot market. However, industry players believe Vale will compensate for lost production with alternative sources in the latter half of the year, fueling optimism for a dry bulk shipping market recovery. Contrastingly, the China Newbuilding Price Index views the dam disaster not as the sole cause but as a trigger for a long-term downturn in the dry bulk sector, driven by an oversupply of shipping capacity, potentially lasting over a decade. Despite this, the Chinese shipowner notes that Vale has made strides in recovering production volumes, especially with the court-approved reopening of the Brucutu mine, contributing to a less severe production downturn than initially feared. The expected increase in iron ore exports from Brazil, bolstered by Vale and Anglo American’s contributions, promises real growth in export volumes. Additionally, the expansion of Vale’s S11D project in northern Brazil is anticipated to significantly boost iron ore exports, further supporting market recovery expectations. The Chinese shipowner also points to the potential for increased spot market volumes, even considering the addition of new Valemax vessels, suggesting that there remains scope for growth in iron ore shipments. Independent Brazilian mines could also supplement Vale’s supply, integrating seamlessly into its transportation network. However, Vale’s own projections are more conservative, estimating a best-case disruption of 50 million tonnes and a worst-case scenario of up to 75 million tonnes of ore production. The company also indicated that reactivating idle capacity could take up to three years. Recent concerns over Vale’s tailings dams may further complicate mine reopenings, casting a shadow over the optimistic outlook presented by the Chinese shipowner. 2-April-2019


Vale’s iron ore production is anticipated to face a significant shortfall of at least 50 million tons this year, with disruptions expected to extend until 2024. This adjustment brings the company’s sales volume forecast for 2019 down to between 307 and 332 million tons from a previous estimate of 382 million tons. Vale highlights that these projections are subject to change due to factors beyond its control. The global iron ore market is set to experience considerable disruption over the next five years, as outlined by the Australian government’s analysis. The aftermath of the Feijao dam collapse is projected to reduce Vale’s iron ore output by approximately 25 million tonnes annually from 2020 to 2024, according to a recent report from Australia’s Department of Industry, Innovation and Science. This report emphasizes the scarcity of alternative high-grade iron ore supplies (65% Fe content) to compensate for this deficit. Iron ore stockpiles at Chinese ports remain elevated, surpassing 120 million tonnes, predominantly of lower-grade ore. This situation followed a restocking phase in February in anticipation of the Chinese New Year. Despite the high inventories, the collapse of Vale’s dam is expected to diminish the seaborne supply of iron ore, leading to a decline in stock levels throughout 2019. Steel manufacturers are likely to incorporate more cost-effective ores into their mixes to safeguard profit margins amidst these supply constraints. The demand for iron ore imports into China is predicted to wane between 2020 and 2024, influenced by a slowdown in construction activities, infrastructure investments, and stricter environmental regulations leading to decreased steel production. However, the seaborne trade outlook is not entirely bleak, as demand is expected to receive a boost by 2024 from emerging Asian economies, notably India and Vietnam, which are pursuing ambitious domestic steel production goals. 28-March-2019


The devastating collapse of a Vale dam in Brazil has prompted Cleaves Securities to revise its capesize rate forecasts downward significantly. Analyst Joakim Hannisdahl now anticipates a downturn in demand growth for capesize bulk carriers throughout 2019, with an expected short-term depreciation in asset values. While analyst Joakim Hannisdahl maintains a more optimistic outlook for smaller bulk carrier trades, he acknowledges that the broader sector’s challenges are largely reflected in current stock prices. In the immediate aftermath of the disaster, Brazilian iron ore exports remained stable as Vale utilized existing inventories. However, from March onwards, the situation has evolved, with Hannisdahl predicting a marked decrease in iron ore shipments from Brazil for the year. Analyst Joakim Hannisdahl suggests Vale’s preference for utilizing its own large fleet could exacerbate difficulties for those operating in the capesize spot market. As a result of these demand challenges, Hannisdahl has adjusted his capesize rate forecast for 2019 downward from $21,423 per day to $15,282 per day. Analyst Joakim Hannisdahl also anticipates a roughly 5% drop in capesize asset values in the coming months, though he expects a recovery—and possibly an increase—in values by year-end. Looking ahead, Cleaves predicts a gradual recovery in Brazilian iron ore exports, which are projected to return to 2018 levels by 2021. Consequently, analyst Joakim Hannisdahl’s forecasts for capesize rates in 2020 and 2021 are set at $17,006 per day and $21,929 per day, respectively, both reductions from earlier projections. Analyst Joakim Hannisdahl also notes the potential mitigating effects of the International Maritime Organization (IMO) 2020 sulphur regulations, which could lead to increased off-hire periods for scrubber installations and potentially encourage slow steaming. Despite the anticipated support from strong demand growth in smaller ship classes, analyst Joakim Hannisdahl cautions that significant improvements for smaller ships are unlikely without a robust capesize bulk carrier market. 13-March-2019


Vale has announced a significant operational setback, with the Minas Gerais Court of Justice issuing an order to cease operations at its Brucutu iron ore mining complex. This decision reverses a prior lower court ruling that permitted the resumption of activities at the mine, leading to the immediate suspension of wet processing operations at Brucutu as per the latest court directive. Despite this, Vale reassures that the Laranjeiras dam, alongside other geotechnical structures at Brucutu, maintains valid declarations of stability (DCE), verified by external auditors in March 2019. This development is expected to impact Vale’s 2019 sales forecast for iron ore and pellets, with projections now adjusted to the lower to mid-range of the initially estimated 307 million to 332 million tonnes. This adjustment follows the catastrophic collapse of the Brumadinho tailings dam at the Feijao iron-ore mine on January 25, 2019, which claimed over 300 lives and led to the closure of 50 tailings dams for inspection, removing 40 million tonnes of iron ore from the market amidst already existing US-China trade tensions. In the midst of these challenges, Vale has confirmed the appointment of Eduardo Bartolomeo as its permanent chief executive. This decision was made following a board of directors meeting and based on recommendations from the international recruiting firm Spencer Stuart. Bartolomeo, a seasoned executive with a decade of experience at Vale, has previously overseen logistics, integrated operations of bulk commodities, and served as executive director of base metals in Canada. His tenure at Vale also includes a stint as a member of the board of directors and the financial committee between 2016 and 2017, bringing extensive experience and leadership to navigate Vale through its current difficulties. 6-March-2019


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