China likely to import more iron ore from Vale

Iron ore being unloaded at Rizhao Port, Shandong province. [Photo provided to China Daily]

New rules to facilitate entry of bulk carriers at the nation's ports

China is likely to import more iron ore from Companhia Vale do Rio Doce, the Brazilian mining giant, to bolster its raw material reserves, after the Ministry of Transport issued a new rule permitting construction of wharves that can berth bulk carriers with a capacity of 400,000 deadweight tons.

The new rule, announced last month, said it is necessary for Chinese ports to keep up to date with the trend of ships getting larger and maintaining safe operations. The ministry previously suggested allowing bulk carriers larger than 300,000 DWT to call at Chinese ports as long as safety can be guaranteed.

Dong Liwan, a professor at Shanghai Maritime University, said the designed limit for larger bulk carriers is 403,944 DWT under the new rule, which is quite close to the mega ore carriers operated by Vale, indicating China is willing to deepen cooperation with the Brazilian company in mining commodity trade, as well as in increasing its iron ore reserves.

Due to opposition from Chinese shipping companies and associations, the Ministry of Transport had barred mega-bulk carriers from the nation's ports since 2011, on security concerns and on grounds that such vessels can lead to monopoly and unfair market competition after the first 400,000 DWT bulk vessel docked at the Dalian port in December 2011.

"With the prices of commodities such as iron ore, coal and cotton remaining sluggish in the global market, it is reasonable for China to import more mining materials as strategic reserves to support the country's ongoing industrial boom," said Dong.

Li Xinchuang, executive deputy secretary-general at the Beijing-based China Iron and Steel Association, said China's iron ore imports are set to pierce the 1 billion-metric-ton mark for the first time this year.

Li said China's iron ore imports are expected to grow 7.1 percent this year, thanks to domestic supplies falling by around 70 million tons.