Dry Bulk Shipping VIII

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Vale rejects ore shipments cancellation report

(Lloydslist) VALE, the world’s largest iron ore producer, has rejected brokers’ reports that it has cancelled or postponed shipments because of price negotiations with Chinese mills.

As of yesterday, 32 ships were waiting to load cargo at Vale’s four ports in Brazil, including 13 ready to load iron ore for Chinese customers, the company said in a statement.

"This number of ships is compatible with the current level of shipments, which continue normally without any anomalies," Vale said.

The clarification came amid widespread reports that an unknown number of iron ore shipments to China had been affected, with one Chinese news agency earlier this week claiming nearly 100 ore carriers were sitting off the coast of Brazil’s loading ports...........read more

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BHP-BlueScope iron deal seen as key to Rio merger

BHP BILLITON has signed an important 10-year iron ore supply deal with BlueScope Steel less than two weeks before the Australian Competition and Consumer Commission is expected to rule on the miner's proposed acquisition of Rio Tinto.

Last month the commission said the proposed BHP-Rio merger might cause concerns in the iron ore market, with the increased concentration of supply having the potential to raise global and Australian prices.

BlueScope is the only iron ore customer in the Australian market; rival steelmaker OneSteel mines its own iron ore in South Australia. The commission's concerns were widely viewed to relate to BlueScope in particular.

The agreement between BHP and BlueScope announced yesterday means the steelmaker has a guaranteed source of iron ore supply until June 2019. This could make it easier for BHP to gain the competition regulator's approval for its Rio bid.

In a sign of the further deterioration of the traditional benchmark pricing system, the contract has different pricing terms than the pair's last agreement, which called for BlueScope to pay the Asian yearly benchmark price.

Under the new deal, BlueScope will buy 4.3 million tonnes of lump and fine ore a year based on a price reviewed quarterly and linked to movements in the price paid by BHP's Asian customers. The Herald understands the price will comprise BHP's average quarterly sales price in Asia, including its spot market sales.

BlueScope also secured an additional 730,000 tonnes a year of iron ore fines to be priced on an index basis, in keeping with BHP's attempts to move its sales prices closer in line with the spot market.

The freight arrangements have been renewed. BlueScope has said its proximity to BHP's mines means it enjoys an iron ore pricing advantage compared with its competitors in Asia.

The commission's decision on the BHP-Rio bid is expected on October 1. BHP also needs to obtain competition approvals from the European Commission, which recently "stopped the clock" on its investigation and has not yet released a new finish date.

Rio shares are trading at a record discount to BHP's bid amid a volatile equity market, but BHP has said the deal makes even more sense in a market downturn.

The Sydney Morning Herald

[Mighty1]

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Genco shielded from slide in spot rates

Bulk of its revenue is from long-term charter contracts


Thee recent slide in the Baltic Drybulk index, which measures spot freight rates, does not imply a risk to revenue at Genco Shipping & Trading Ltd as most of its revenue comes from long-term charter contracts whose prices are fixed in advance, a top official said.

'The fall should not affect us in the short- and medium-term because we have 94 per cent of our available days for 2008 locked-in under time-charters,' Genco chief financial officer John Wobensmith said in an interview. Genco has also contracted 60 per cent of available days in 2009. A shipping company can either rent out its fleet on a day-to-day basis, known as a spot-charter, or sign long-term contracts, called time-charters.

Spot-charters boast lucrative rates, but may lead to an uneven revenue stream. On the other hand, a time-charter contract brings steady revenue.

Since striking a record high in May, the London-based Baltic Drybulk index, which tracks spot-charter rates, has lost about 60 per cent as it has been knocked by .....read more

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BHP wants to sell uranium to China for decades

BHP Billiton, the world's largest mining company, is positioning itself to supply China with uranium for "decades'' as the country ramps up its nuclear plant program in a carbon conscious world.

Chief executive Marius Kloppers said nuclear energy would play a ``bigger role'' in China going forward and BHP Billiton was ``very actively positioning'' to be part of that.

"As China is developing its nuclear program, what it's doing is it's gearing up for a bigger build program,'' Mr Kloppers said in a DVD sent to shareholders.

"That will take a couple of years, but clearly we are positioning the company to, from our side, participate in that over decades, not just a couple of years.''

BHP Billiton's Olympic Dam copper, gold and uranium mine in South Australia, about 560 kilometres north of Adelaide, houses the world's largest known uranium resource.

The company supplies uranium to utility customers in the United Kingdom, France, Sweden, Finland, Belgium, Japan, South Korea, Taiwan, Canada and the United States.

BHP Billiton does not have any supply contracts with China.

"If the world is serious about cutting carbon emissions, then you cannot have a debate without the nuclear piece in that debate, because it is the most efficient way to cut carbon emissions,'' chairman Don Argus said.

Olympic Dam produced 4144 tonnes of uranium in the 2007/08 financial year, with the company investigating a potential expansion of the mine, which could increase annual output to 19,000 tonnes.

In its annual report today, the company unveiled a 22.6% upgrade in the uranium reserves to 283,800 tonnes and a four per cent increase in resources to 2.33 million tonnes......read more