Baosteel Group Corp, China's biggest steelmaker, doubled its orders to four 300,000-ton ships from China Ocean Shipping Group Co (Cosco) to carry iron ore from Brazil as demand for the commodity rises and freight costs soar.
Baosteel and Cosco signed an accord on Aug 4 to add two ships, each carrying 1.14 million tons of ore annually from Brazil for 20 years, Baosteel said in a statement yesterday on its website. Baosteel agreed to lease two iron ore vessels from Cosco in November 2004.
Baosteel's move to lease ships on longer-term contracts may help the steelmaker cut transport costs. Nippon Yusen KK, Japan's largest shipping line, may sign a contract with Baosteel by the end of this month to ship ore to China from Australia starting in 2010, Nippon Yusen spokesman Hideki Nakai said yesterday.
The cost of bringing a ton of ore from Tubarao in Brazil to Chinese ports of Beilun or Baoshan near Baosteel has increased 73 per cent this year to US$58.19, according to the Baltic Exchange. Baosteel agreed to pay about US$73.2 for each ton of pure iron contained in the ore from Brazil's Vale do Rio Doce.
The first of the four ore vessels will start operation next year, yesterday's statement said. Baosteel will also lease a 70,000 ton carrier from Cosco to carry 450,000 tons a year of imported coal for three years, the statement added.
Baosteel and Cosco signed an accord on Aug 4 to add two ships, each carrying 1.14 million tons of ore annually from Brazil for 20 years, Baosteel said in a statement yesterday on its website. Baosteel agreed to lease two iron ore vessels from Cosco in November 2004.
Baosteel's move to lease ships on longer-term contracts may help the steelmaker cut transport costs. Nippon Yusen KK, Japan's largest shipping line, may sign a contract with Baosteel by the end of this month to ship ore to China from Australia starting in 2010, Nippon Yusen spokesman Hideki Nakai said yesterday.
The cost of bringing a ton of ore from Tubarao in Brazil to Chinese ports of Beilun or Baoshan near Baosteel has increased 73 per cent this year to US$58.19, according to the Baltic Exchange. Baosteel agreed to pay about US$73.2 for each ton of pure iron contained in the ore from Brazil's Vale do Rio Doce.
The first of the four ore vessels will start operation next year, yesterday's statement said. Baosteel will also lease a 70,000 ton carrier from Cosco to carry 450,000 tons a year of imported coal for three years, the statement added.