Vale signs $5.84-billion transport deal for iron ore to China
22 Sep 2009
Brazilian miner Vale has signed a $5.84-billion long-term deal with the world's fifth biggest dry bulk carrier, South Korea's STX Pan Ocean to transport iron ore from Brazil to China.
The consecutive voyage contract (CVC) signed yesterday, is the largest in the shipping industry. STX Pan Ocean will transport 3 billion tons of iron ore for Vale from Brazil to China over 25-years starting from the fourth quarter of 2011 to the fourth quarter of 2037.
Shipping companies have been trying to secure long-term contracts over spot bookings after spot rates nosedived last year by 92 per cent due to a slump in demand and overcapacity.
Container shipping was the worst hit last year although the dry bulk shipping sector managed to stay afloat helped by the rising demand for commodities in China due to the country's stimulus spending.
With an annual turnover of over $9 billion, STX Pan Ocean, South Korea's biggest bulk-shipping company, operates a fleet of 305 bulk carriers, of which, 71 are company owned, while 234 are chartered.
An official from STX Pan Ocean said, ''We have been putting our best efforts to expand our market sales power despite the recession in shipping industry.''