Malaysia allows Vale to keep iron ore port open

Brazilian iron ore producer Vale will keep open its Teluk Rubiah iron ore blending terminal in Malaysia after discussions with government officials.

Vale was planning to shut down the 30mn t/yr terminal over 21-31 March to comply with a country-wide lockdown aimed at slowing the coronavirus outbreak. Malaysian officials have since said it can remain open.

"Based on the communications from, and our discussions with, the national and local agencies and authorities, Vale considers, from where the situation stands, that it can continue to operate the TRMT [Teluk Rubiah terminal]," it said yesterday.

Vale said it is working on a contingency plan to keep the terminal operating while in communication with the government.

Vale blends most of its 63pc Fe BRBF fines at Chinese ports, minimising the impact of a disruption to supplies, but the Malaysian blend is considered superior to blends made in China.

Premiums for Vale iron ore fines soared on 18 March when the closure was announced. BRBF portside prices rose by 32 yuan wet metric tonne (wmt) to Yn723/wmt, only to fall by Yn32/wmt to Yn691/wmt yesterday. The 65pc index that prices in line with Vale's 65pc Fe IOCJ Carajas fines rose by $1.95/dry metric tonne (dmt) to $107.20/dmt that day.

Vale estimated the disruption will only affect around 800,000t in sales.

Vale ships 65pc Fe iron ore from its northern system and 62pc Fe ore from its southern system to Asia in Valemax vessels that can only be unloaded at deeper ports.

By Chris Newman