Cosco today revealed plans to build 10 huge bulkers against life-long contracts with Vale, signalling a potential shift on China's Valemax ban.
James Leake, managing director of research at Arrow said: “Some will spin this as a negative for capes, but in reality the release of a few vessels from transhipment operations would barely be felt by the market. More importantly, the final acceptance of Valemaxes would underline the growing dependence of Chinese steelmakers on imported iron ore at a time when many domestic miners face bankruptcy at current iron ore prices. Countering what he sees as a negative obsession with the Valemax from some pundits, Leake says at least 50 converted VLCCs presently carry far more iron ore from Brazil to China than is lifted by the valemaxes."
New Building ships by Cosco and China Merchant Energy Shipping (CMES) for life-long charter to Vale. Dry Market Veteran added: “This type of deals are not shipping deals, they are conveyor belts like in a factory.”