The Chinese shipping companies - Chinese shipping majors Cosco Group, China Merchants Group and ICBC Financial Leasing Co- ordered 30 Valemaxes worth a combined $2.5 billion for delivery starting from 2018, deployed on Brazil-China trade routes, reports WSJ.
The vessels will bosst the trade between China and Brazil and also will invest billions of dollars into delaying shipbuilding industry in the country. The vessel will be employed on Brazil-China trade routes, boosting the import of Vale iron ore in China.
Sources said the three state-controlled shipping companies ordered 10 ships each from four local yards—Shanghai Waigaoqiao Shipbuilding, Beihai Shipbuilding, CIC Jiangsu and Yangzijiang Shipbuilding—with deliveries scheduled to begin in 2018.
According to sources, China Cosco Shipping Corporation ordered 10 Valemax ore carrier is Shanghai Waigaoaqiao Shipbuilding, while ICBC Leasing acquired six contracts at Yangzijiang Shipbuilding and four at Behai Shipbuilding.
China Merchants also purchased ten contracts – four at Shanghai Waigaoaqiao Shipbuilding (SWS), four at Behai Shipbuilding and two at CIC Jiangsu.
“Despite the collapse in the dry-bulk market, the Chinese are ordering new vessels to effectively control iron-ore freight rates over the next 10 years or so,” said Basil Karatzas of Karatzas Marine Advisors & Co., a New York-based maritime adviser.
Basil added: “This will put more pressure on dozens of independent shipowners struggling to cope with record low freight rates.”
Valemaxes were introduced to the market in 2010 by Brazilian mining giant Vale SA. It can move up to 360,000 tons of cargo. They are twice as big as Capesize vessels, the biggest mass-production dry-bulk ships, which move around 180,000 tons.