China Building Mega-Ships to Transport Iron from Brazil

Editor’s Note: In this week’s Thursday Feature, we take a look at a new class of super-sized ships that carry enormous loads or iron ore and other materials to the world’s ports.

Maersk Triple E Cargo Ships
The nose of a Maersk Triple E ship under construction in Korea (Photo courtesy of Russavia via Wikimedia Commons)

As the world economy grows, so does the size and scope of the vessels used to delivery products. The Brazilian mining company Vale, the world’s largest iron producer, has ordered the construction of 50 new mega-carrier transport ships that can carry nearly double the amount of iron ore that current ships can haul, according to

Recently, the Brazilian mining company Vale — the world’s largest iron ore producer — ordered construction of 50 new mega-carrier transport ships that can carry nearly double the amount of iron ore that current ships can haul, according to published reports.

Largest Carriers Ever Built

The new ships — dubbed “Valemax” class carriers — will have the capacity to carry 400,000 deadweight tons of iron, making them the biggest bulk carriers every built. The largest ships currently used to haul iron can carry only about 250,000 deadweight tons.

Each of the new Valemax class ships will have the capacity to carry an estimated two million tons of iron ore from  Brazilian mines to China annually.

The Chinese shipping company China Cosco Holdings would build 20 of the ships while China Merchants Energy Shipping Co. would build 10. Vale already had placed an order for 20 of the ships — 10 with each company — in 2014.

A spokeswoman for Vale would not confirm the order to the Wall Street Journal, but the newspaper was able to verify it with two independent sources. If confirmed, it would be the largest order for such ships ever.

World’s Second Biggest Commodity

Iron ores are rocks and minerals that are mined from the ground and used to make pig iron, the primary raw ingredient for steel. It is the second biggest commodity in the world after oil.

China is the world’s largest producer of iron ore, producing 1,320 million metric tons per year, followed by Australia (530 million), Brazil (398 million), and Brazil (398 million). The United States is eighth on the list, producing only 52 million metric tons of iron ore annually.

The largest natural sources of iron ore in the world are in South America — primarily in Brazil –and in the Pilbara region of Western Australia.

Vale’s Iron Ore Carrier Gamble

The ships would be built on 20-year leases. The timing of the order is noteworthy because of the price of iron ore is at a 30-year low on international commodities markets. But construction costs are low, so Vale may be betting that its investment now will pay huge dividends in the future.

In fact, the remarkable capacity of the new ships could affect the price of shipping iron ore globally. Currently, it costs about $10 per ton to ship iron ore but Vale is looking to fix rates at about $13 per ton once its new ships are built.

Previously, China banned ships larger than 250,000 deadweight tons from entering its ports between January 2012 and September 2014. But the country relaxed its rules to allow Valemax class ships beginning in February of this year.

The Lastest Move in Super-Sized Shipping

Valemax ships are just the latest manifestation of the “bigger is better” philosophy when it comes to shipping.

Recently, a mega-sized class of cargo container ships began appearing in ports around the world. Until very recently, the Chinese-owned CSCL Globe was the world’s largest container ship, capable of carrying an astounding 19,100 cargo containers.

The ship surpassed the previous record-holder –the Matz Maersk Triple E, which has a capacity of 18,000 cargo containers — as the world’s biggest ship. But it was beaten out in January by the MSC Oscar, which set sail on its inaugural voyage from the berth in Busan, South Korea, where it was built.

The MSC Oscar has an incredible cargo capacity that is capable of transporting 39,000 cars, 117 million pairs of gym shoes, or more than 900 million cans of dog food on any single trip.

To accommodate these new giant ships, ports had to be deepened and widened. Huge storage yards featuring towering cranes have been built in places like Hamburg, Germany; Shanghai, China; and Long Beach, California. And these yards were connected to rail lines and trucking terminals.

Later this year, a wider and deeper Panama Canal will open, allowing Valemax class carriers and super-sized cargo containers known as Panamax ships to reach East Coast ports from Asia for the first time.