China’s Valemax Ban Means Increased Iron Ore Shipping Costs for Vale

Reuters reported that Vale SA (NYSE:VALE) is losing between $2 and $3 per tonne in iron ore shipping costs as a result of China’s ban on its Valemax ships. Since Vale cannot bring these ships to Chinese ports, it has to transfer its ore to smaller vessels at sea, which is more costly.

As quoted in the market news:

The 400,000 deadweight tonne Valemax ships, designed for the China trade, should save the company $6 per tonne compared with smaller ships, [Jose Carlos] Martins[, chief of iron ore at Vale,] told investors and analysts.

Click here to read the full Reuters report.