December 28, 2011 / 3:07 AM / in 8 years

UPDATE 4-Giant Vale ship unloads maiden iron ore cargo in China

* Berge Everest delivering cargo at Dalian port-sources

* First of Vale’s giant ships to dock at a China port

* Ship carrying 350,000 tonnes of iron ore

* Vale declines to comment

By Ruby Lian and Randy Fabi

SHANGHAI/SINGAPORE, Dec 28 (Reuters) - China has received the first of Vale’s giant iron ore vessels, industry sources said on Wednesday, a major breakthrough for the Brazilian miner after months of uncertainty over the fleet’s access to the world’s top steelmaker.

Top iron ore exporter Vale is spending billions of dollars to build the world’s biggest dry bulk ships to cut the cost of shipping the steelmaking ingredient to China, but until now had failed to gain Beijing’s approval for the six vessels already on the water to even stop at a Chinese port.

Vale’s 388,000-tonne vessel, Berge Everest, began delivering its iron ore cargo at China’s Dalian port on Wednesday and was expected to depart on Saturday, shipping sources said.

“The ship is unloading iron ore after arriving this morning. They will need 2-1/2 days to discharge such cargo,” said a port agent.

“It is not clear at present who will buy the iron ore.”

Reuters Freightviews and independent shipping data confirmed the vessel was anchored at the port. Industry sources said there was around 350,000 tonnes of iron ore onboard.

Vale officials in China and Brazil declined to comment on Wednesday. A spokeswoman for the ship’s owner, Singapore-based Berge Bulk, and Dalian port officials were not immediately available for comment.

Vale’s fleet has faced stiff opposition from influential Chinese shipowners and steelmakers, who fear the ships are a Trojan Horse which the miner will use to monopolise both the shipping and iron ore markets at their expense.

Vale’s first mega bulk vessel, Vale Brasil, was forced to turn around in the Indian Ocean on its maiden voyage in June after the Chinese government failed to provide permission for the ship to dock at Dalian. It went to Taranto, Italy, instead.

SHIPOWNERS

The arrival of the Berge Everest is ill-timed for Chinese shipowners who are already struggling with a severe downturn in the industry driven by rock bottom freight rates, high fuel prices and an oversupply of ships.

Things got so bad that China’s top shipping conglomerate COSCO Group and Grand China Logistics were forced to temporarily halt payments to foreign ship owners earlier this year to renegotiate better terms.

“Vale’s ships won’t break any company, but it will be damaging,” said a Singapore-based ship broker said on Wednesday.

China Shipowners Association urged Beijing this month not to rush into any decision on allowing Vale’s ships into China, warning that the vessels have not been thoroughly tested and any oil leak from one could be catastrophic.

One of Vale’s vessels, Vale Beijing, became severely damaged while preparing to set sail on its maiden voyage earlier this month.

Vale Beijing was built by South Korea’s STX Offshore & Shipbuilding, while Berge Everest was made by China’s Bohai Shipbuilding Heavy Industry.

Shipping data this week initially showed the Berge Everest destined for a port in the Philippines after a brief stop earlier in Singapore.

“For the past few days, it was drifting around the Phillippines area awaiting instructions,” said T.S. Ang, technical executive at BW Fleet Management, which manages the crew and safety operations on Berge Everest. He was unable to confirm the ship’s current location.

Vale is planning to build a fleet of 35 giant vessels, each with capacity of around 400,000 tonnes, to feed top importer China’s growing demand for the commodity. The firm aims to ship around 130 million tonnes, or 40 percent of its total iron ore output, to China next year.

China is expected to import a total of around 720 million tonnes of iron ore in 2012, up from 679 million tonnes this year, according to a Reuters poll. Steel mills in the world’s second-largest economy consumes around a billion tonnes per year of iron ore.

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