China’s decision to
construct a raft of new very large ore carrier (VLOC) terminals is
being interpreted by some analysts as part of a bigger geopolitical
play to cut the nation’s reliance on Australia for its iron ore
imports amid a severe souring of diplomatic ties between the two
Asia-Pacific nations.
Beijing’s National
Development and Reform Commission (NDRC) has given the green light
for four new VLOC terminals to be built in Rizhao, Yantai and
Lanshan in Shandong province, and Sanduao in Fujian province to go
alongside the existing seven VLOC terminals.
“Commentary on the move has
speculated that Beijing is seeking to ensure greater ‘iron ore
security’ for the future, not only by opening itself to a wider
range of of markets, including Brazil, but also to countries where
there is less chance of political disagreement,” Alphabulk pointed
out in its most recent weekly report.
Australia, which exports 90%
of its iron ore to China, has been a vocal opponent of China’s
telecoms company Huawei, and also recently joined the US in opposing
China’s maritime claims in the South China Sea. It was also the
first country to come out and call for an international enquiry into
China’s handling of Covid-19.
China has responded by
restricting Australian coal and barley imports. As well as Brazilian
miner Vale, Alphabulk suggested African miners could benefit from
the long-haul routes made possible by the new terminals.
Vale would also have a
greater operational flexibility as the new terminals would enable it
to blend different ores more easily to cater for the individual
needs of geographically dispersed steel mills.
Source: Sam Chambers |