Brazilian mining giant Vale is strengthening its logistics presence in the Asian market by deepening strategic partnerships with South Korean shipping companies. Most recently, Vale announced the signing of a 10-year long-term shipping contract with South Korea's leading carrier HMM. The agreement is valued at KRW 636.2 billion (approximately USD 462 million).
Operations to Begin in 2025 and Continue Through 2035
Under the agreement, HMM will transport iron ore for Vale from Brazil to China between July 2025 and June 2035. The company stated that this long-term partnership will not only bring greater stability to its dry bulk operations, but also represent a strategic step toward strengthening its presence in the large-tonnage shipping segment.
The deal accounts for 5.4% of HMM’s total sales in 2024, and in Q1 2025, dry bulk operations represented 11.8% of the company’s KRW 2.8 trillion in total sales.
Vale Also Signed a Major Deal with Pan Ocean
The agreement with HMM marks Vale’s second major dry bulk shipping contract signed this year. In April, the company entered into a five-year contract worth KRW 236.7 billion (approximately USD 172 million) with another South Korean shipping firm, Pan Ocean. Under that deal, two large ore carriers will transport iron ore from Brazil to China and other destinations.
Fleet Expansion and New Market Entry in Focus
HMM aims to become South Korea’s leading bulk carrier and a globally recognized mid-sized container shipping company by 2030. As part of its long-term strategy, the company has committed to investing KRW 23.5 trillion, including KRW 1.7 trillion specifically earmarked for expanding its dry bulk fleet. Currently operating 17 dry bulk vessels, HMM recently acquired the 207,600 dwt Luise Oldendorff to further strengthen its fleet.
Acknowledging the market challenges—such as US-China trade tensions and growing fears of a global economic slowdown—HMM plans to mitigate risks by maximizing revenue from existing contracts through short-term chartered vessels. The company also plans to explore high-margin markets like South America and Australia with small to mid-sized vessels to enhance profitability.
New Era in the Asia-Pacific Shipping Corridor
Vale’s rapid conclusion of strategic shipping agreements with both HMM and Pan Ocean highlights its intent to build a reliable and efficient logistics corridor between Brazil and China. At the same time, these partnerships underscore South Korean carriers’ rising competitiveness in the global dry bulk market.
Comments
No comment yet.