HMM Co. has landed another long-term iron ore transport contract with Brazilian mining giant Vale SA, marking the second such deal between the companies as the South Korean carrier accelerates its shift away from volatile container shipping markets.
The 430 billion won ($323 million) agreement spans 10 years from 2026 to 2036 and will see HMM deploy five bulk carriers to haul iron ore, the Seoul-based company said Thursday. The contract follows a 636 billion won ($477 million) deal signed with Vale in May, signaling deepening ties between the Korean shipper and one of the world’s largest mining companies.
The agreements underscore HMM’s broader strategy to reduce dependence on container shipping, where freight rates have remained depressed following a post-pandemic collapse. HMM plans to nearly double its bulk fleet to 110 vessels by 2030 from the current 36 ships, diversifying revenue streams through long-term contracts that offer more predictable income than the container market’s spot rates.
Bulk carriers often enter into long-term contracts of five years or more, which can help mitigate the revenue uncertainty in the container sector, which is subject to significant market volatility, according to the company. The carrier currently ranks eighth globally in container capacity but holds less than 3% market share in a sector dominated by larger European and Asian rivals.
Vale has been expanding partnerships with Korean shipping companies as it seeks to secure transport capacity for iron ore exports to Asia. Pan Ocean, another South Korean carrier, signed a separate five-year deal worth 237 billion won with Vale in April, highlighting Brazil’s mining sector’s growing reliance on Korean maritime services.
HMM’s bulk expansion represents part of a 23.5 trillion won ($17.6 billion) investment plan through 2030 that includes fleet modernization and terminal acquisitions. The company, majority-owned by state-run Korea Development Bank, abandoned privatization plans earlier this year after failing to find suitable buyers.
