HMM Signs KRW 4.697 Trillion Long-Term Transport Contract with Vale

en.Wedoany.com Reported - On September 8, South Korean shipping company HMM announced that it has signed a long-term cargo transport contract with Vale International S.A., a subsidiary of Vale, with a contract value of KRW 4.6972 trillion, approximately USD 3.455 billion, equivalent to 43.13% of HMM's consolidated sales of KRW 10.8914 trillion for fiscal year 2025. The contract was officially signed on September 7, with service areas including markets such as Brazil and China.

The contract period runs from April 1, 2030 to October 31, 2056, lasting approximately 26 years and 7 months under the current arrangement. The contract does not include a contract deposit or advance payment; freight is settled on a per-voyage basis and paid within 10 business days after loading for each voyage. HMM stated that the contract start date corresponds to the expected operational commencement of the first designated vessel and may be adjusted based on vessel delivery schedules; the contract end date may also vary depending on actual vessel operating days.

The contract amount was calculated based on total sales value and the exchange rate of KRW 1,359.50 per USD announced on September 6. HMM also clarified that final contract revenue may be affected by factors such as exchange rates, fuel prices, shipping routes, and actual vessel operating days. Under the contract terms, Vale also holds an option to extend the contract for up to 5 years and may choose to adjust the propulsion fuel scheme of the designated vessels, in which case the contract amount would also be adjusted accordingly.

HMM has already initiated fleet investments related to this long-term transport business ahead of schedule. As disclosed by the Korea Exchange on June 24, HMM's board of directors approved the construction of 8 bulk carriers and 2 gas carriers, with a total investment of approximately KRW 1.664 trillion, with the investment period extending through the third quarter of 2031. The investment decision for the 8 bulk carriers is conditional upon approval by the cargo owner's board of directors, and the project aims to enhance the competitiveness of HMM's bulk carrier fleet.

Public information shows that this long-term transport contract with Vale will correspond to the 8 bulk carriers that HMM previously planned to build, which are expected to enter service sequentially starting in 2030. The new vessels are Newcastlemax-class large bulk carriers and are planned to be equipped with multi-fuel propulsion systems capable of using methanol, ethanol, and conventional fuel. HMM's previously disclosed vessel investment plan shows that the 8 bulk carriers and the additional 2 gas carriers are scheduled for delivery no later than the third quarter of 2031.

HMM and Vale have previously signed multiple long-term iron ore transport contracts. In May 2025, the two parties signed a 10-year transport contract worth approximately KRW 636 billion; in September of the same year, they signed another long-term transport contract worth approximately KRW 430 billion, under which HMM plans to use 5 bulk carriers to transport iron ore from the second quarter of 2026 to the first quarter of 2036. As of the end of 2025, the two sets of long-term contracts with Vale disclosed by HMM involve 3 and 2 bulk carriers, respectively.