Vale freight, fuel hedges cushion impact of rising shipping costs

Brazilian miner Vale SA’s freight and fuel hedging strategies have protected the company from the worst impacts of higher shipping costs facing iron ore producers, CEO Gustavo Pimenta said.

About 75% of Vale’s shipping needs are covered by long-term contracts at fixed prices over the next few years, while the remaining needs will be managed through shorter-term contracts.

“This structure provides flexibility while limiting direct exposure to the spot market,” Pimenta said on the company’s third-quarter earnings call.

The war in the Middle East has ratcheted up global fuel prices, contributing to higher maritime freight costs for Brazilian iron ore producers. Several producers have halted or reduced production because of the high rates.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →