HMM signs 10-year transport contract with Vale
Deal is in line with HMM’s efforts to increase profitability in order to address the volatile market outlook
To expand its fleet of bulk carriers, the South Korean shipping company purchased nine secondhand dry bulkers after the first quarter of 2024
SOUTH Korea’s HMM has entered into a long-term freight transport contract with Vale, running from July 2025 to June 2035.
The contract amount of Won636.2bn ($462m) accounted for 5.4% of sales in 2024, HMM said in a stock market filing.
In the first quarter of 2025, the bulk sector accounted for 11.8% of the total sales amount of Won2.8trn, while the container sector took 86.4%.
According to HMM’s long-term strategy, the company will invest Won23.5trn to become a global mid-tier container shipping carrier and a leading bulk carrier in South Korea by 2030.
To achieve this, a fleet expansion programme is currently underway, with Won1.7trn set to be invested in expanding the bulk fleet.
HMM operates 17 ships comprising 1.8m dwt in the dry bulk sector, of which 14 are owned and three are chartered-in.
Compared to the first quarter of 2024, that fleet increased by 146,000 dwt due to the purchase of nine secondhand dry bulkers, the sale of one vessel, the redelivery of three chartered-ins, and the delivery of one chartered vessel.
The company confirmed that it recently bought the 207,600 dwt Luise Oldendorff (IMO: 9714240) from Oldendorff Carriers.
HMM did not disclose the price it paid for the vessel.
In terms of market outlook, the South Korean carrier forecast that the dry bulk market is expected to remain soft due to an increased level of uncertainty caused by reciprocal tariffs between the US and China, as well as weaker demand stemming from growing concerns over a global economic recession.
In response to the volatile outlook, HMM plans to maximise the revenue from contract of affreightment cargo on hand by utilising short-term chartered vessels.
Another consideration is entering high-margin markets such as South America and Australia with small and mid-sized vessels, in order to boost profitability.
Meanwhile, before making the recent deal with HMM, Vale entered into a long-term transport contract with another South Korean carrier.
In April, Pan Ocean announced that it had signed a five-year, Won236.7bn long-term freight deal with Vale. Two ore carriers will be deployed to transport iron ore from Brazil to China and other destinations.
