Hyundai Merchant wins $315m Hebei Iron deal
South Korea"s second largest shipping company, Hyundai Merchant Marine, and mainland Chinese partner Shandong Far East Marine Group, have won a $315m, 15-year deal from China"s Hebei Iron & Steel Group to transport 23m tonnes of iron ore.
The pact involves the shipment of 1.5m tonnes per year of iron ore from Brazil and Australia to China starting later this year and continuing until 2025.
Hyundai Merchant Marine confirmed the deal would generate $21m in annual revenues.
The agreement with Hebei Iron & Steel, the world"s second largest steelmaker, follows a strategic agreement between Hyundai Merchant Marine and its Qingdao-based partner that was inked earlier this year.
There were no immediate details of how the contract would be serviced although insiders said the size of the transportation requirement would suggest the need for two dedicated capesize vessels.
Hyundai Merchant Marine operates 10 owned and three chartered capesize ships totalling more than 2.15m dwt.
The company is also planned to take delivery of one owned and three chartered capesize bulkers this year followed by two owned and three chartered vessels in 2011 and 2012.
"China has the largest steel market in the world, and we will continue to expand our market presence there," Hyundai Merchant Marine said.
The deal with Hebei Iron & Steel came after Shandong Far East Marine signed a similar 15-year deal with Tangshan Iron & Steel Group in northern China's Hebei province in 2008.