Nippon Yusen KK, Japan's largest shipping line, has signed a 40 billion yen (S$506 million), 20-year contract with Cia Vale do Rio Doce to carry iron ore from Brazil to China as it seeks long-term deals to lock in higher rates.
The shipping line will transport 1.3 million tons of iron ore a year for Vale, the world's largest producer of the material, beginning in 2011, Nippon Yusen spokesman Hideki Nakai said by phone from Tokyo on Tuesday. The company has ordered a 300,000-ton ship, costing about 10 billion yen, from Kawasaki Heavy Industries Ltd's Chinese venture to support the deal, he added.
Nippon Yusen and other shipping lines have signed long-term contracts to secure rates that have more than doubled over the past year. Mitsui OSK, Japan's second-largest shipping line, agreed to a 22-year deal to ship iron ore for Baoshan Iron & Steel Co in January. It was the company's fifth long-term deal with China's largest steelmaker, it said.
The Vale contract is the first long-term deal between a Japanese shipping company and a resources producer, Mr Nakai said. Nippon Yusen's longest contract with a resources company previously was for about five years, according to the Nikkei newspaper, which reported the Vale contract on Tuesday.
The Baltic Dry Index, a measure of chartering rates for different sized vessels, has more than doubled over the past year.
The shipping line will transport 1.3 million tons of iron ore a year for Vale, the world's largest producer of the material, beginning in 2011, Nippon Yusen spokesman Hideki Nakai said by phone from Tokyo on Tuesday. The company has ordered a 300,000-ton ship, costing about 10 billion yen, from Kawasaki Heavy Industries Ltd's Chinese venture to support the deal, he added.
Nippon Yusen and other shipping lines have signed long-term contracts to secure rates that have more than doubled over the past year. Mitsui OSK, Japan's second-largest shipping line, agreed to a 22-year deal to ship iron ore for Baoshan Iron & Steel Co in January. It was the company's fifth long-term deal with China's largest steelmaker, it said.
The Vale contract is the first long-term deal between a Japanese shipping company and a resources producer, Mr Nakai said. Nippon Yusen's longest contract with a resources company previously was for about five years, according to the Nikkei newspaper, which reported the Vale contract on Tuesday.
The Baltic Dry Index, a measure of chartering rates for different sized vessels, has more than doubled over the past year.