Iron ore shiploader fire won't impact PDM monthly shipment schedules: Vale

London and Singapore — Monthly iron ore shipment schedules will not be impacted as a result of a fire that broke out early on Jan. 14 at a shiploader at Vale's main iron ore export terminal in northeast Brazil, the miner said Jan. 15.

The Ponta da Madeira Maritime Terminal in São Luís, Maranhão in northeast Brazil, continues to operate, the company said.

The terminal exports ore from Vale's high-grade Carajas mine and pellets.

The incident at one of Vale's shiploaders at the terminal "was contained without victims or environmental damage," the company said in a statement. "The affected site is undergoing an assessment and the causes of the incident are under investigation."

A ship agent source informed clients that Vale is still assessing the extent of the damage caused by the fire at PDM's Pier 4 South and that repairs and maintenance should start immediately after evaluation.

"During this period, the vessels scheduled to load at Pier 4 South will be redirected to Pier 4 North, which should impact the line-up and congestion," the source was cited as saying.

Another source said the damaged shiploader might need to be replaced.

As large vessels which may use Pier 4 typically serve the Asian market, sources consider that an impact on Asia shipments may still be possible.

According to cFlow, S&P Global Platts trade-flow software, no fewer than 27 large iron ore carriers are expected to be in berth or arrive at PDM or enter the PDM vessel queue in the Jan.15-Jan. 20 period, coming mainly from Asia. Ten of these vessels are Very Large Ore Carriers, having capacity of approximately 400,000 dwt.

Platts assessed the 62% Fe Iron Ore Index at $172.80/dry mt CFR North China on Jan. 15, up $1.30/dmt on the day.

Seasonal factors

A China-based ship-operating source said Jan. 15 that it was "still waiting to see how the situation is there [in PDM] and it is definitely not a positive news for the Capesize freight market."

The source added that it would take a conservative strategy for the first-quarter, which is a seasonally low period, as poor weather is expected to disrupt iron ore shipments out of Brazil as well as Australia.

The Capesize freight market out of Brazil was quiet during the Asian trading hours Jan. 15.

"The Brazil market has been muted since [Jan. 14], all players are in the waiting mood without [placing] any bids and offers," a shipbroker said.

Another shipbroker said that for mid-February laycan, bids were heard at high-$18s/wmt from ship-operators while the best offer he saw was around $20/wmt.

The freight indicated on the Brazil to China route was in the range of high-$18s/wmt to $19.85/wmt.

The freight rate for a Capesize ship to move 170,000 mt (plus/ minus 10%) of iron ore from Tubarao, Vale's export port in southeast Brazil, to Qingdao was assessed at $19.60/ wmt, down 30 cents/wmt.