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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: dvdw© who wrote (61851)	3/28/2010 4:41:50 AM
From: elmatador	Respond to of 219737

Why China should not complain of 114% increase of iron ore prices. Rongsheng Shipbuilding and Heavy Industries of China got $1.6B VLOC deal. While Vale tries to increase the price of iron ore. Iron goes to produce steel which is a more high value added. Then tranform that steel into VLOCs which is again a more value added transformatrion, and export the ships back to Vale. Again, import=>tranform=>export. Adding value along the chain. Vale signs $1.6B VLOC deal with Rongsheng Vale has signed a contract with Rongsheng Shipbuilding and Heavy Industries of China for the construction of 12 VLOC (very large ore carriers) vessels. Each one will have a load capacity of 400,000 dwt. With the aim of maximising the efficiency of its operations, Vale is developing several initiatives to take advantage of economies of scale. These include the use of longer trains in its railways – with 330 wagons – and more efficient locomotives, as well as the creation of a maritime freight service between Brazil and Asia, a region where growth in demand for iron ore looks set to continue. The vessels ordered will be the largest bulk carrier vessels ordered for ore in the world and will be part of the logistic solution of iron ore among Vale’s maritime terminals in Brazil and the Asian clients. The vessels have high level of security and will contribute to the reduction in the cost of transoceanic transportation of iron ore for the iron and steel companies. The first of these vessels is scheduled to be delivered at the beginning of 2011, with the others to be delivered by the end of 2012. The total cost of the vessels is US$ 1.6B. The Brazil-Asia transportation line will have 18 large bulk carriers (VLOC), with total capacity of 7.1 million dwt, in addition to the company’s three capesize vessels. The fleet will have capacity to transport 30.2 mtpa of iron ore from Brazil to Asia, which equates to 31% of its shipments to China in 2007.