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Author Topic: Subic to become iron ore transshipment hub  (Read 3709 times)
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« on: February 02, 2012, 02:39:57 PM »

 
From a report by Anthony Bayarong on the Philippine Star:

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Brazilian company Vale Shipping Holding (VSH) is set to make this Freeport the biggest transshipment hub of iron ore in the country after one of the biggest floating terminal stations (FTSs) docked here Monday.
 
Subic Bay Metropolitan Authority (SMBA) chairman Roberto Garcia said Ore Fabrica (FTS) had already docked in Subic Bay and will be operational in the middle of February.

“The new project is said to bring P25 million in revenue per year for Subic Bay Freeport,” Garcia said.
 
“It has already docked here but you cannot see it because it is at the mouth of the bay,” Garcia added.
 
VSH, which owns Ore Fabrica (FTS), a 280,000-deadweight-tonne vessel, will serve as a platform to transship iron ore from Brazil using valemaxes for transport to China, an official of SBMA said.
 
Report said that VSH was forced to make Subic as a transshipment hub after China banned giant dry bulk vessel and oil tankers recently.
 
Official document showed that the agreement between VSH and SBMA was signed on August last year.
 
The Brazilian company is one of the world’s largest producers of iron ore and controls the largest share of iron ore seaborne trade market, followed by Anglo-Australian companies BHP Billiton and Rio Tinto Group.
 
VSH is also the second biggest nickel producer in the world.

 
« Last Edit: April 10, 2012, 08:20:15 PM by Forum Admin »

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« Reply #1 on: February 07, 2012, 12:10:24 PM »

 
From a report by Jonas Reyes on the Manila Bulletin:

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Some P70 million worth of additional revenue is being eyed by the Subic Bay Metropolitan Authority (SBMA) through the transshipment operation of Brazil’s Vale Mining, one of the world’s biggest iron ore producers.
 
According to SBMA Chairman Roberto Garcia, the agency has entered into an agreement with Vale Mining, making this free port the hub of Vale’s iron transshipment operations in Asia and turning Subic into a major player in the maritime logistics industry in the Asia Pacific Region.
 
“The main reason why Vale has located its operations here is Subic’s strategic location in the Asia-Pacific region,” Garcia said. “And it’s all about economies of scale. Vale will haul its ore products to Subic using its big carriers, then transfer the iron ore to smaller vessels, which the smaller ports in China will be able to accommodate,” he said.
 
“This is a very fortuitous development for SBMA because Subic will be at the very center of what is expected to be the biggest ship-to-ship transfer operations in the world in terms of volume,” Garcia noted.
 
“When Vale starts full operations on Feb. 12, we expect the SBMA to earn some P70 million in additional income in the first year alone because of the projected increase in ship calls, as well,” Garcia added.
 
According to SBMA deputy administrator for port operations Redentor Tuazon, Vale will utilize its Valemax carrier vessels, which have a capacity of up to 400,000 deadweight tons (DWT), to deliver iron ore to several ports in China, now the world’s biggest user of iron ore.
 
The company will carry out its iron ore transshipment operation from its Valemax mother vessels, supplying ore to smaller daughter vessels, or feeders, which are either Panamax or Capesize types. The especially-designed floating terminal that will supply feeder ships will be anchored in Subic Bay.
 
Tuazon said preparations are now underway for the initial transshipment operations. M/V Ore Fabrica, the floating terminal station, arrived here last Monday and M/V Vale Brazil is set to arrive on Feb. 13.
 
Owing to the magnitude of the transshipment operation, Tuazon said various marine safety measures have been put into place, including the conduct of hazard and operability (HAZOP) analysis jointly made by representatives of Vale Brazil, SBMA, and agent companies involved in the operations.
 
All of the vessels to be used in the operation are insured and covered with protection and indemnity insurance, Tuazon added.
 
The SBMA has been aggressively pushing for the Port of Subic Bay to be a premier marine logistics hub in the region, as it continues to develop the market for the full utilization of Subic’s container terminals.
 
Recently, it has also offered various incentives to shipping companies for the development of new shipping routes to Singapore and Hong Kong.
 
The arrival of Vale Brazil here would help Subic secure its place on the map in terms of floating terminal operations, Chairman Garcia said.

 

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« Reply #2 on: February 10, 2012, 01:32:05 PM »

 
From the Maritime Executive:

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Genoa-based Logmarin Advisors, part of the RINA Group, has enabled Brazil’s Vale SA to convert the Ore Fabrica (the former VLCC Front Duchess) into the world’s largest transhipment vessel. It will shortly come into operation at a site in Subic Bay, the Philippines, where it will operate as a platform for the transhipment of iron ore cargoes from Vale’s 400,000 dwt valemax ore carriers into capesize vessels for on carriage to markets in Asia.
 
Logmarin assisted Vale by devising and supervising the detailed design of the conversion and by procurement assistance, selection of the Ore Fabrica terminal management, and developing operation and safety procedures, Hazard and Operability analysis, transhipment site identification and permits. Support includes assistance during commissioning and personnel training.
 
The new cargo handling plant, the only one of its kind, consists of five Liebherr MPG cranes and a sophisticated conveyor belt/loading system designed and built by Bedeschi of Padova. The cargo handling facility is certified by RINA.
 
The conversion was carried out at the Jiangsu Xinrong Shipyard in China. A total of 4,643 tonnes of new plant and structure went into the conversion. The installation of 9,680 KW of power gives the vessel a 5,000 tonnes-per-hour capacity – sufficient to load a capesize vessel in 36 hours. From design to delivery, the entire conversion took 333 days to complete.
 
The vessel is managed by MSI Ship Management Pte Ltd of Singapore.
 
Logmarin provides broad-based advice and experienced ideas to tailor-make innovative supply chain solutions for the specific needs of the clients, taking into account environmental and commercial issues at site. Logmarin aims to configure the industry’s marine supply chain as effectively as possible.

 

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« Reply #3 on: April 10, 2012, 08:23:30 PM »

 
From an article by Michelle Bockmann on Businessweek:

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Vale SA (VALE3), the biggest producer of iron ore, idled two of the world’s largest carriers of the commodity for as long as a month and delayed taking delivery of two new vessels after Brazilian cargoes to China slumped.

Vale China and Vale Brasil, both able to carry 400,000 metric tons, stayed at Subic Bay in the Philippines where they unloaded, according to vessel tracking data compiled by Bloomberg. A spokeswoman for Vale in Rio de Janeiro declined to comment, in an e-mailed response to questions, asking not to be named in line with company policy.

Vale China arrived at Subic Bay on Feb. 27 and next signaled about 23 miles away on March 31, by which time it was sailing for Singapore, the data show. The vessel was 8.4 meters (27.6 feet) higher in the water once it departed, indicating cargo was unloaded. Vale Brasil arrived at Subic Bay on Feb. 11 and signaled from the same place on March 3. Its next signal was on March 8 about 200 miles from Singapore.

Vale, which controls about 26 percent of seaborne iron ore trade, is spending more than $8 billion on the so-called Valemax ships to lower freight costs to Asia from Brazil and allow it to compete with Australian exporters. Eight of the 35 ships being built for Vale were delivered in the past 11 months, according to the spokeswoman and company statements.

The Valemaxes have so far been excluded from China, the company’s biggest customer. Jose Carlos Martins, Vale’s head of ferrous and strategy, told journalists in London on Dec. 7 that the company was was seeking permits for the vessels to call at Chinese ports.

Environmental risk

Zhang Shouguo, vice executive chairman of the China Shipowners Association, said in December that the carriers “arouse safety and environment risks” because Vale lacks experience in shipping, according to a transcript of his remarks on the group’s website.

Daily operating costs for the Valemax fleet are $33,956 to $39,691, including fuel and loan repayments, according to estimates from DVB Bank SE. The estimates are based on fuel costs at $500 a metric ton and a contract price of $130 million a ship.

The delivery of two more Valemaxes ordered by Vale from China Rongsheng Heavy Industries Group Holdings Ltd. has been delayed, a spokesman for the Chinese shipbuilder said today by phone from Hong Kong, declining to be identified in line with company policy.

Delivery Stalled

Vale, which placed an order for 12 ships worth $1.6 billion in 2008, requested delays last year because of technical issues relating to port operations, the spokesman said. The second ship, Vale Dongjiakou, will be delivered to Vale soon, he said, declining to elaborate. The spokeswoman for Vale declined to comment.

Brazil’s first-quarter ore exports plunged 27 percent from the previous three months to the lowest level since June 2009 as rains and flooding in January delayed production, trade ministry data show. About 45 percent of Vale’s ore sales are to China, and shipments take 45 days to reach there, the company says.

Vale shipped 26 percent of the world’s seaborne ore trade in 2010 of 995 million tons, the latest figures from the United Nations Conference on Trade and Development show.

Iron ore at the Chinese port of Tianjin slumped 15 percent to $147 per ton in the past year, according to data from Steel Business Briefing.

 

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« Reply #4 on: May 07, 2012, 10:53:44 AM »

 
Excellent information about the Vale transshipment terminal here at Subic.

From an article by Gavin van Marle on Port Technology:

Quote
Behind the creation of a new floating transhipment terminal in the Philippines on behalf of the Brazilian mining giant Vale, is the story of emerging geopolitical tensions over China’s seemingly endless need for raw materials; between China, who believe that it is they who should carry the flows of raw materials into the world’s manufacturing heartland; and one of the world’s largest shippers, which sells said iron ore to the Chinese – and pays for its shipments.
 
The origins of this dispute lie in the desire by Vale to limit its exposure to the tempestuous swings in freight rates to which it was subject prior to the terrible depression into which the dry bulk shipping industry has found itself. Before the recession and subsequent crash in vessels values and charter rates, Vale found that its profit margins on the ore it was selling to Chinese steel mills were being eroded by a long-running bull market in freight rates and charter rates in the largest dry bulk vessel sizes – demand from China for iron ore was high and vessel space was in short demand, and Chinese and other shipowners made a lot of money out of transporting iron ore from Brazil to China.
 
In fact, such was the cost of transporting iron ore from Brazil to China at the height of the boom in 2008 that Vale almost lost its market share to Australian miners – despite the fact that the grade of ore mined in Australia is of a far lower quality – because of the differential in freight rates.
 
Vale then decided to enter the shipowning game itself, in what must be one of the most ambitious attempts by a cargo owner to assert its control over its supply chain with an original order of a series of very large ore carriers (VLOCs). At 362 meters long and 65 meters wide, and with a carrying capacity of 400,000 deadweight tonnage, Vale’s VLOCs represent the largest dry bulk carriers on the seas, and have subsequently been termed Valemaxes.
 
The initial order, placed in 2008, was for a series of 12 vessels worth $1.6 billion, or around $140 million per vessel and, at the time they were ordered, represented considerable cost savings for the Brazilian company – it was estimated that a fully laden Valemax vessel running between Brazil and China would be carrying its cargo at 28 percent cheaper per tonne than a vessel half its size.
 
The first in the series, the Vale Brazil was delivered in the middle of last year, and unfortunately coincided with the complete devastation of the dry bulk trades. Demand from China for iron ore has slowed markedly, but far more destructive has been the glut of newbuildings of similar size, or in the slightly smaller capsize segment that have been delivered since Vale placed its orders – and eventually it is due to operate a fleet of 35 Valemaxes.
 
This downturn in the market has had two effects – it has ruined the financial prospects of Chinese dry bulk shipowners, some of whom are partially state-owned and are now suffering dreadful losses, according to the latest financial results being posted on the Hong Kong and Shanghai stock exchanges; but it has also made iron ore cheaper for the Chinese steel mills to purchase.
 
As a side point, it is ironic that it is those self-same steel mills that provided the materials to the Chinese shipyards which continue to construct all these vessels that are causing such havoc to the market.
 
But crucially, there are only a few ports in China which are able to handle vessels of such sizes, and the Chinese government has yet to give its permission for the Vale vessels to dock at either Qingdao or Dalian – the two that it had earmarked to construct massive distribution facilities at.

There are reports that one Valemax did a trial docking at Dalian, but since then China’s ministry of transport has placed a ban on vessels of that size entering its ports, citing safety concerns – and in that respect it has been vindicated by a recent crack found on the hull of the Vale Beijing.

Vale’s plan B has been to develop a floating terminal in Subic Bay in the Philippines to operate has a hub-and-spoke transhipment port, with the ore being loaded onto smaller vessels, and thus partially losing the economies of scale that the Valemaxes were originally intended to achieve.

Nonetheless, until Vale and China come to some sort of agreement over the Valemaxes calling directly at Chinese ports, the interim solution, centred on the creation of a floating iron ore terminal, will have to suffice, with ore loaded onto capsize vessels.

Built with the assistance of Italian classification society RINA’s supply chain consulting subsidiary Logmarin, Vale has converted the former very large crude carrier Front Duchess into the world’s largest floating transhipment vessel.

Renamed the Ore Fabrica, managed by Singapore’s MSI Ship Management and now moored at Subic Bay, the vessel was converted at the Chinese shipyard of Jiangsu Xinrong, which installed five Liebherr MPG cranes and a sophisticated conveyor belt/loading system designed and built by Bedeschi of Padova.

The cargo handling facility is certified by RINA.

The double girder deck grab cranes have been designed for vessel to vessel transhipment operations, with a lifting capacity of 35 to 41 tonnes and radius of 38 meters, and have four independent drive systems.

Altogether 4,643 tonnes of new plant and structure went into the conversion of the vessel, and the installation of 9,680 kilowatts of power gives it a 5,000 tonnes per hour capacity – enough to load a capesize vessel in 36 hours. From design to delivery, the entire conversion took 333 days to complete.

Vale is also constructing a new land-based transhipment terminal in Malaysia, which is due to open in 2014 and will boast an annual handling capacity of 60 million tonnes. What will happen to the Subic Bay operation after that is operational is yet to be decided.

 

Education is what remains after one has forgotten what one has learned in school. (AE)
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