Friday, 29 Jul 2011
Bloomberg reported that China largest shipping companies are lobbying the government to foil Vale SA plan to build a USD 2.3 billion fleet of the world biggest iron ore carriers that will haul the steelmaking material to the nation.
Mr Zhang Shouguo executive vice chairman of the China Shipowners Association said Vale, the world largest iron ore producer, should engage the shipping companies to run the fleet. Rio de Janeiro based Vale is building 19 of the 400,000 tonnes vessels and will control another 16 under long term contracts aiming to stabilize freight costs and iron ore prices.
Mr Zhang who was a former deputy director of the water transport division of China Ministry of Transport said “Let the shipping industry do the transport thing. Vale is seeking to control the freight market as it has done with iron ore prices.”
Mr Zhang said Chinese regulators haven’t approved any of its ports to increase accommodation capability to more than 300,000 dead weight tons for dry bulk carriers because of safety and environmental concerns.
He said that “Many shipping companies may incur losses because of the monopoly on the route. We’ve made it clear to the government that we object to the major cargo owners building their own fleets.”
Mr Zhang said without elaborating that the association which represents 85% of China total shipping capacity is trying to seek cooperative shipping contracts with Vale. Should the need arise, it may also ask the government to investigate whether Vale breached the Chinese regulations against market manipulation or monopoly.
A Vale official in Rio de Janeiro, declining to be named according to corporate policies said the company won’t comment.
(Sourced from Bloomberg)
Bloomberg reported that China largest shipping companies are lobbying the government to foil Vale SA plan to build a USD 2.3 billion fleet of the world biggest iron ore carriers that will haul the steelmaking material to the nation.
Mr Zhang Shouguo executive vice chairman of the China Shipowners Association said Vale, the world largest iron ore producer, should engage the shipping companies to run the fleet. Rio de Janeiro based Vale is building 19 of the 400,000 tonnes vessels and will control another 16 under long term contracts aiming to stabilize freight costs and iron ore prices.
Mr Zhang who was a former deputy director of the water transport division of China Ministry of Transport said “Let the shipping industry do the transport thing. Vale is seeking to control the freight market as it has done with iron ore prices.”
Mr Zhang said Chinese regulators haven’t approved any of its ports to increase accommodation capability to more than 300,000 dead weight tons for dry bulk carriers because of safety and environmental concerns.
He said that “Many shipping companies may incur losses because of the monopoly on the route. We’ve made it clear to the government that we object to the major cargo owners building their own fleets.”
Mr Zhang said without elaborating that the association which represents 85% of China total shipping capacity is trying to seek cooperative shipping contracts with Vale. Should the need arise, it may also ask the government to investigate whether Vale breached the Chinese regulations against market manipulation or monopoly.
A Vale official in Rio de Janeiro, declining to be named according to corporate policies said the company won’t comment.
(Sourced from Bloomberg)
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