Bloomberg News

STX-Vale Mega-Ship Yet to Move to Brazil Port for Repairs

December 07, 2011

(Updates with share price in fifth paragraph, shipping data in 10th paragraph.)

Dec. 6 (Bloomberg) -- The Vale Beijing, a commodity ship longer than three American football fields, hasn’t yet moved to an anchoring area from a Brazilian terminal to repair a leak in a ballast tank of the iron-ore carrier.

The ship, which Vale said late yesterday would be moved within the “next few hours,” was still moored at the port of Ponta da Madeira at about 11 a.m. local time, according to a Vale press official, who can’t be identified because of company policy and spoke in a telephone interview.

The leak in the $110 million Vale Beijing, which was carrying about 384,000 metric tons of iron ore, was found about two months after the ship was delivered to its Seoul-based operator STX Pan Ocean Co. Vale, the world’s biggest iron-ore miner, didn’t say whether the vessel would be unloaded or if schedules at the terminal in northeastern Brazil were disrupted.

“In a worst case scenario, assuming all three piers at Ponta da Madeira are stopped for a month, the impact on shipments would be 8 million tons, or about 3 percent of Vale’s annual shipments,” Leonardo Correa, an analyst at Barclays Plc in Sao Paulo, said in a note to clients today.

Vale fell 0.7 percent to 40.21 reais at 1:48 p.m. in Sao Paulo. The stock dropped 16 percent this year through yesterday, compared with a 15 percent decline in Brazil’s benchmark Bovespa index.

Chinese Opposition

The ship is the first in a fleet of eight that STX will operate under a $5.8 billion, 25-year deal with Vale. The Brazilian company intends to control 35 vessels as big as the Beijing to pare risks from fluctuating freight rates.

The ships, the biggest built for hauling commodities, have sparked opposition from shipowners in China, the biggest buyer of iron ore, because of concerns they may worsen global overcapacity that has caused a slump in cargo rates and earnings.

The Vale Brasil, the biggest commodity ship ever built, was designed to carry iron ore to China from South America. The company ships about 45 percent of sales to the Asian nation and plans to buy 19 vessels for $2.3 billion.

The Vale vessels are about twice as big as the capesize ships that are generally used to ferry commodities from Brazil to China. The miner plans to send about 130 million tons of iron ore on the route both this year and next.

The Vale Beijing berthed at the port of Ponta da Madeira at 9:28 a.m. local time on Dec. 2. and was due to leave after 8 a.m. on Dec. 4, according to Vale’s website. The terminal is located on the eastern shore of Sao Marcos bay on the island of Sao Luis, in Maranhao state, according to the website.

--With assistance from Kyunghee Park in Singapore and Rodrigo Orihuela in Rio de Janeiro. Editors: Robin Saponar, Dale Crofts

To contact the reporters on this story: Juan Pablo Spinetto in Rio de Janeiro at; Laura Price in Buenos Aires at

To contact the editors responsible for this story: Dale Crofts at; Neil Denslow at

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