Wednesday, August 5, 2009

Vale to Build New Ships

Iron giant hopes to further cut costs
Shipping News Feature

BRAZIL - Vale SA, the world’s largest iron-ore producer, is planning to build ships with 400,000 deadweight tons capacity to serve the growing Chinese steel market, according to Bloomberg.

Vale hopes that the new vessels shall further drive down their transport costs, something that is crucial to their viability for this market as currently their rates are double those of their competitors BHP Billiton Plc and Rio Tinto, both of which are based in Australia and hence much closer to China.

To try and manage their shipping costs the company has purchased 15 ships and ordered 20 new-built vessels since the start of the global economic crisis. Last year the company shipped 35.6 million tons of iron-ore to China.