High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
LONDON -(Dow Jones)- Brazilian iron ore producer Vale SA (VALE) will likely wait until the end of the Lunar New Year to sell a massive cargo of iron ore that was delivered into the Chinese port of Dalian via one of its “very large ore carriers” or VLOCs at the end of December, two traders said.
Vale docked its Berge Everest, one of its supersized ships also known as a Valemax, on Dec. 29 with about 350,000 metric tons iron ore, according to Chinese state-run media.
Iron ore brokers Wednesday confirmed that the cargo had been unloaded and put into bonded warehousing, a London-based trader said. “They’re [Vale is] sitting on it and waiting to sell. It’s a big lot to auction in one go,” he noted.
The trader said Vale will likely wait until the end of the Lunar New Year when Chinese traders return to work to sell the cargo. Vale is “happy to wait” until Jan. 25, he said, the date when full trading activity resumes. Another London-based trader confirmed the same view.
Vale declined to comment.
Spot iron ore fines with 63.5% ferrous content for China delivery have stayed mostly unchanged at $146 a ton Thursday versus $144/ton in late December, when the Berge Everest unloaded at Dalian, according to Metal Bulletin data. The first trader said he could see iron ore prices rise up to $150/ton as Chinese demand returns to the market.
The supersized ships, Valemax, are designed to reduce the miner’s disadvantage in shipping iron ore over long distances to China, but have recently come under fire from the Chinese shipping industry lobby.
-By Alex MacDonald, Dow Jones Newswires
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