China paves the way for Vale mega-ships

China has amended the rules for ships to allow Vale to ship iron ore to the docks of ports on the mainland, paving the way from Brazilian mines in its giant ships. Vale's mega ships, the world's largest transporting ore, have been barred from China since January 2012 due to regulations that barred vessels over 250,000 tonnes from docking.

China's Ministry of Transport said last week that it is currently allowing ports to receive ships with a capacity of 400,000 tons. This suggests that ports capable of accommodating such large ships can now apply for a permit to service them.

The permit is seen as an official first step by the government to allow the Valemaxes to enter China. China's previous capacity rules were aimed at preventing Vale's mega-carriers of iron ore from accessing amid pressure from Chinese shipowners. The new amendment was developed two years ago, but was postponed after Valemax called at the Chinese port of Lianyungang in April 2013, and now the rules have been officially published.

Vale's inability to dock iron ore carriers at Chinese ports has already cornered the company's efforts to cut shipping costs to compete with Australian rivals such as BHP Billiton and Rio Tinto, which are closer to China. Vale's mega-ships are now getting official permission to enter China, at a time when iron ore prices are near a six-year low.