London: A senior executive from China's largest shipping conglomerate has warned the continued rise of the big three iron ore producers 'could be very harmful to the industry'.
'I believe nobody sitting in this room could be in a dominant position in dry bulk, even Cosco,' said Simon Young, executive deputy director of the Cosco's research and development department, speaking at the World Dry Bulk Shipping Summit in London yesterday.
'Only those who can control exports of iron ore and also those who have larger ship-operating capacity -- they're the ones in the dominant position. This could be very harmful to the industry.'
Vale, BHP Billiton and Rio Tinto now collectively control 70% of global seaborne trade in iron ore, the trio shifting close to 700m tonnes last year.
Shipowners are acutely aware of how the miners are increasingly taking control of their own shipping requirements. Vale, for instance, sees steel cutting of its octet of VLOCs at Rongsheng Heavy Industries start this November.
This year's annual negotiations between China and the big three miners are stretching longer than normal with a resolution expected now in mid-July. [01/07/09]
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