China regulations limiting vessel size at ports deals a blow to Vale

|About: Vale S.A. (VALE)|By:, SA News Editor

New regulations from China's Ministry of Transport issued this week could threaten Vale's (VALE) plans to use supersize ships to serve China, WSJ reports.

The rules limit the size of vessels that can call at Chinese ports to those carrying loads of 250K deadweight tons or less; that's a problem Vale, which has led a multibillion-dollar investment program to build a fleet of giant Valemax carriers capable of loading 400K dwt of cargo.

The huge cargo vessels were designed to allay the higher distribution costs and longer delivery times Vale faces compared with rival mining companies in Australia who are geographically closer to China.