Source: Reuters

Brazilian miner Vale has not yet sold its first mega iron-ore cargo delivered to China two weeks ago, and has instead stored the material near a port for now. While Vale is a competitor to Mongolia's iron-ore industry, it was also once looking to invest here as a bidder for the Tavan Tolgoi western block project.

Vale may be waiting for the week-long lunar New Year break to pass for Chinese demand to reinvigorate. The company, which sells about 40 percent of its ore to China, is counting on a fleet of 35 Valemaxes to cut shipping costs and better compete with Australian rivals BHP Billiton and Rio Tinto. The iron-ore producer may offer a discount for the cargo of high-grade ore with 65 percent iron content given that it was the first material shipped on its Valemax—a “short-term ploy” to draw customers to its big shipments.

Vale's first mega-ship cargo to China was forced to turn back in June last year due to the lack of permits. In early December Vale Beijing developed cracks in its hull on its maiden voyage. The China Shipowners Association has opposed Vale's fleet, worried that the vessels will give the miner monopolies on both the shipping and iron-ore markets at China's expense.