Korean shipper HMM inks iron ore freight deal with Vale

The contract, worth KRW 430 billion ($309 million), is a ten-year deal beginning from April 1 2026 until March 31 2036.

HMM, the former Hyundai Merchant Marine, is in the process of building up its bulk cargo fleet, as Mysteel has reported, and intends to deploy five bulk carriers for this contract bringing iron ore from Brazil mainly to China.

"Securing stable volumes of bulk-carrying contracts will help offset volatility in the container-shipping market and support growth," Korea's Yonhap news agency quotes a company spokesman as saying. The company is expanding its bulk fleet to 110 vessels (equal to 12.56 million Dead Weight Tons) by 2030 from the current 50, also as reported.

The agreement is the second HMM and Vale have concluded this year following another signed on May 24 worth a much larger KRW 636 billion that begin on July 1, will run until June 30 2035, and also ply the same Brazil-China route.

HMM's announcement comes exactly one week after news broke on September 5 that South Korea's largest steelmaker, POSCO Group, is considering buying a controlling stake in the shipper.

The Korean government's Korea Development Bank (KDB) is currently KMM's largest shareholder with a 36% stake, but the government wants to sell KDB's share and is expected to call bids for its stake later this year – a tender which POSCO is expected to join, as reported.

The steelmaker currently spends about KRW 3 trillion annually on logistics and consumes about 60 million tonnes/year of iron ore, imported chiefly from Australia and Brazil.

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com