China’s new Yantai deep water port receives first iron ore mega ship from Brazil’s Vale

Brazilian miner Vale this week docked its first skyscraper-sized ore ship at one of China’s newest deep water ports, putting into motion Beijing’s strategy to diversify its sources of iron ore.

The fully-laden Valemax iron ore carrier, named Sea Maranhao, arrived at the Port of Yantai in Shandong province about mid-day local time on Wednesday after departing Brazil’s Ponta Da Madeira Maritime Terminal on June 20, according to S&P Global Platts and maritime intelligence website MarineTraffic.

Vale currently operates 67 Valemax ships around the world, making its iron ore shipments to China price competitive with those from Australian miners, who mostly use smaller Capesize ships for the shorter journey.

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Valemax vessels can carry much bigger loads than normal ships, up to 400,000 deadweight tonnes (dwt), half again larger than the 250,000dwt to 300,000dwt capacity of Capesize vessels.

The new shipment would increase Vale’s ability to blend different grades of iron ore to accommodate the varying needs of Chinese mills on a “just in time” basis, S&P Global Platts said.

“This is the same measure as Vale took at the port of Teluk Rubiah in Malaysia years ago. Vale’s port-side blending business has been expanding quickly in the past few years in China and it makes sense to use larger ships to achieve lower average freight cost,” S&P Global Platts analysts said.