The dip in China\u2019s growth has exacerbated a nosedive in iron ore prices which plummeted from nearly US$200 per tonne in 2010 to less than US$50 this year.<\/p>\n
Moreover, the Chinese government\u2019s move toward restructuring the economy has meant many smaller steel plants have been shut down in order to favour larger facilities. This too has impacted ports, many of which grew up in the hothouse of China\u2019s 2005-2010 investment programmes.<\/p>\n
<\/p>\n
So, while over the last eight or 10 years some bulk ports have hit the headlines with record throughput, the difficult market has resulted in stiff competition between them. All this has meant that many ports are now scrambling for something to give them the edge.<\/p>\n
Further pressure is being piled on Chinese dry bulk ports because Vale, in order to compete with Australian ore, built no less than 37 very large ore carriers in order to give their products substantial economies of scale, potentially chopping the price of shipping ore from Brazil from $22 per tonne to around $15 per tonne. The first thing that happened was Cosco, worried about losing a substantial amount of market share, got these vessels blocked from China, sending Vale into building up an alternative, very high tech Malaysian entry point for ore transhipment.<\/p>\n
While the original motivation for breaking into the Chinese market has faltered and the Cosco-led impasse has been resolved – allowing VLOCs to call in Qingdao, Dalian, Tangshan and Ningbo – these vessels are now a reality, as is the accompanying technology, and both are driving market dynamics in a wider sense.<\/p>\n
Size matters<\/strong><\/p>\n The big issue centres on size, explains Jeff Zhu of ABB: the Valemax is the largest bulk ship ever built and at 360m long and 400,000 dwt is twice as big as capesize carriers \u2013 and quite a number of bulk facilities (especially in China) are constrained by vessel limits of 300,000 dwt.<\/p>\n Those that find this reminiscent of box trade history won\u2019t be surprised by his assertion that while draft is important \u2013 something between 23m and 25m depth – bulk facilities will also need high capacity handling equipment to match. After all, these carriers can deliver over 11,000 truckfulls of ore in one go.<\/p>\n ABB has delivered electrical and automation systems for larger, 3,000 tonnes per hour grab ship unloaders (GSU). These are sized not just for a steady throughput but for peak and out of schedule calls; something that becomes even more of an issue with the upscaled vessel size points out Mr Zhu\u2019s colleague, Billy Li, following on from a discussion at TOC Europe.<\/p>\n He adds that these automation functions allow the drivers \u201cto relax\u201d while still maintaining a short cycle time, resulting in a higher-than-average efficiency. Further, evening out the differences between drivers also results in more accuracy when it comes to berthing schedules.<\/p>\n But it\u2019s the \u2018total effect\u2019 of an integrated system, rather than the dropping in of one or two GSUs, that makes the real difference, not only on cycle time but also on overall running costs, and \u201calthough it\u2019s not something the bulk ports have bothered about until now\u201d, in the current conditions even a few percent saving here and there looks attractive, says Mr Zhu.<\/p>\n So, ABB\u2019s GSU \u2013 along with other plant machinery – has benefitted both from high efficiency motors that shave 2% or 3% in costs and from a careful tailoring of components so nothing is wastefully oversized. Further, inverters can be linked by a common DC bus so rather than just burning off the energy from the grab lowering operation with resistors, the regenerated power is shared between the other units.<\/p>\n There\u2019s another layer of efficiency for those interested in large scale bulk: for example, stacker-reclaimers at Vale\u2019s Malaysian facility at Teluk Rubiah have automatic operation. The stockpiles are scanned by 3D sensors while the gantry and bucketwheel are positioned by GPS, together \u201creducing mechanical shock to the system as well as improving safety\u201d, says Mr Li. Underpinned by ABB\u2019s 800xA control system these save a significant amount of time and energy as movements are taken in the shortest, most efficient manner. But further, this element allows Vale to blend ores of different grades to play up different characteristics rather than just selling them separately.<\/p>\n Now China has finally opened its doors to the big carriers, facilities with deeper water will be looking to them for lift above the present troubles. Certainly Dalian, the first Chinese facility to catch these large visitors, has been suffering from the dire market conditions with iron ore throughput falling by over 11% to around 8.3m tonnes for the first half of 2015. Further, the picture has been complicated by rising overland costs: the port has been losing out to facilities closer to the steel mills, resulting in that part of the business\u2019 revenue plummeting by over 26% year-on-year according to its financial report. Its unsurprising Dalian is therefore pinning its hopes on the attractiveness of its 23m depth for VLOCs.<\/p>\n SOHAR TAKES A CHANCE WITH VALE<\/strong><\/p>\n It\u2019s not all about China. When Vale started to search for a Middle East facility back in 2007, it needed to look hard at what was needed to match the scale of the VLOCs, settling on Sohar as it has the deepest port in South Asia and the Gulf region and is placed in a good location just on the lip of the Straits of Hormuz.<\/p>\n Vale\u2019s Sohar facility has 1.4km long deep-water terminal with 25m depth, divided into three berths: \u201cOne for imports, two for exports, as a lot of exports go out on a shuttle service and this layout allows two different ship sizes to be berthed at the same time,\u201d explains Vale in Oman\u2019s chief executive Sergio Espeschit.<\/p>\n After unloading, the product is then sent over to Vale\u2019s capacious 40m tonnes throughput stockyard (20m in and 20m out) before being passed to the 9m tonne per annum pelletising plant. From here it returns to the fully automatic, remotely-monitored loader for export. Linking it all together are conveyor belts with a total length of 4.5km which, explains Mr Espeschit, \u201cact like the veins and arteries of our operation”.<\/p>\n If you add the four VLOCs, there\u2019s been a huge $2bn invested on the combined project. With the market trading close to Vale\u2019s publicly mentioned break-even price of $39 per tonne and given the recent market dynamics, it\u2019s probable that any new facilities would hesitate over investing in the technology necessary to support the economies of scale.<\/p>\n Still, port facilities are there for the long term \u2013 and tend to be more durable than market conditions. Sohar\u2019s plant got a few good years in, producing almost 35m tonnes of pellets to date since its inauguration in 2012 with the port handling almost 80m tonnes of product in total.<\/p>\n Mr Espeschit says the \u2018value added\u2019 from the processing element is key: \u201cThe plant is competitive since it can produce high quality pellets at a low cost\u201d. Further, the distribution is not just local to the GCC and Middle East but has a reach that extends down to Africa and Asia, the market spread lending a certain amount of resilience. On top of this, he points out that there\u2019s still good reason for bulk facilities to look positively at bigger carrier sizes; shipping agency fees, supplies as well as handling charges soon add up so ports and their businesses \u201csee around $3.3m being generated by just a single Valemax call\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":" Bigger ships have pushed the technological envelope for bulk ports, finds Stevie Knight<\/p>\n","protected":false},"author":8,"featured_media":4396,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[],"sponsor":[],"class_list":["post-4395","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-container-cargo-handling"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/4395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/comments?post=4395"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/4395\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media\/4396"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media?parent=4395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/categories?post=4395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/tags?post=4395"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/sponsor?post=4395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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This allows for an average handling rate of 6,000 tonnes per hour so a Valemax can be unloaded in about three days although there is plenty of room for peaks in the demand as each unit is sized for a nominal capacity of 3,600 tph, giving the facility an extra 80% margin.<\/div>\n