HMM signs US$462M 10-year freight transport contract with Vale

The 10-year agreement, announced on 27 May, is valued at approximately US$462M and covers freight shipments between Brazil and China. The contract is scheduled to begin in July 2025 and run through June 2035.

Riviera reported in mid-May that Vale was present in the market, seeking tonnage, which contributed to the positive sentiment in Capesize charter rates. 

This is Vale’s second long-term freight agreement with a South Korean shipping company in just over a month. Earlier in May, the Brazilian miner signed a five-year, US$160M charter deal with Pan Ocean, involving two ore carriers to transport iron ore from Brazil to China and other destinations.

HMM referenced its dry bulk strategy in its Q1 earnings report, stating its intention to expand into high-margin routes such as South America and Australia, deploying small- and mid-sized vessels to drive profitability.

However, the company acknowledged ongoing challenges in the dry bulk market, citing elevated geopolitical uncertainties – particularly related to the US-China relationship – and concerns over a potential global economic slowdown, both of which are weighing on demand.

Strategic fleet expansion

As part of its push into dry bulk shipping, HMM is actively expanding its fleet through newbuildings and secondhand acquisitions. According to recent reports from Asia-based shipbrokers, the company is linked to the purchase of two Newcastlemax bulk carriers.

At the end of Q1 2025, HMM operated 17 bulk carriers totalling 1.87M dwt, including 14 owned vessels and three chartered-in.

Looking ahead, HMM has set an ambitious goal of becoming South Korea’s leading bulk operator by 2030. The company plans to grow its tanker and dry bulk fleet from 42 vessels at the end of 2024 to 110 vessels by the end of the decade, supported by an estimated US$3.9Bn investment.