Chinese steel giant Baosteel is forming a joint-venture with China Shipping to secure tonnage for its iron ore imports. “It will help Baosteel to control shipping costs and help China Shipping to increase market share,” Li Shaode, President of China Shipping said yesterday. China Shipping will have majority stake in the joint-venture which will charter out five ships to Bao Steel with another leased out to other companies, the China Daily has reported. Two of the ships will be of 300,000 dwt each and four of 230,000 dwt each. Baosteel will have 49% stake in the new venture, which will be registered in Hong Kong. Operations are likely to being this quarter. The ships are most likely to be newbuilds already ordered at Chinese yards though more orders may be placed as the fleet is expected to be doubled to 3M dwt by 2015. Baosteel is likely to accept a 65% hike in ore price by the world’s three largest producers adding to its cost of imports.
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