HMM Signs KRW 4.7 Trillion Long-Term Transportation Contract with Brazil’s Largest Mining Company

[Financial News] HMM has signed a KRW 4.7 trillion long-term transportation contract with Vale, Brazil’s largest mining company. The company plans to expand long-term contracts with major shippers and strengthen the bulk business’s stable earnings base.
HMM announced on the 8th that it had signed a KRW 4.7 trillion contract with Vale to transport cargo for 25 years per vessel starting in 2030.
This is HMM’s third major contract, following the KRW 1.0665 trillion, 10-year long-term transportation contracts signed with Vale in May and September last year. HMM disclosed in June that it planned to place new orders for eight bulk carriers to be deployed under this contract.
The vessels, scheduled for sequential delivery starting in 2030, will be 210,000-ton-class Newcastlemax bulk carriers. They will be equipped with the world’s first tri-fuel propulsion engines capable of using methanol, ethanol, and heavy fuel oil. They will also be built as LNG- and ammonia-ready vessels so they can be converted to liquefied natural gas (LNG) or ammonia propulsion in the future. To improve fuel efficiency and reduce carbon emissions, the ships will also feature wind-assisted propulsion systems such as rotor sails, which use wind power to generate thrust.
Since Choi Won-hyuk took office as president at the end of March last year, HMM has pursued a restructuring of its bulk fleet while strengthening its core container business. The company aims to secure stable fixed revenue by reducing its reliance on short-term charters and expanding long-term contracts with financially sound major shippers. As a result, operating profit in HMM’s bulk business rose from KRW 74.5 billion in the second half of last year to approximately KRW 240 billion in the first half of this year alone, putting the business on a growth trajectory.
HMM is also broadening its bulk fleet beyond conventional dry bulk carriers and tankers to include gas carriers, pure car and truck carriers (PCTCs), and multipurpose vessels (MPVs). The bulk fleet grew from 44 vessels at the end of March last year to 61 in the first half of this year.
An HMM official said, "This contract is an achievement that once again demonstrates our solid partnership with a global major shipper. We will continue to strengthen our stable earnings base by increasing the proportion of long-term contracts and reshaping our business portfolio, while expanding our operations around high-profit and future-growth areas."
[email protected] Jung Won-il Reporter