SEOUL, September 08 (AJP) - HMM has signed a 4.7 trillion won ($3.5 billion) long-term shipping contract with Brazilian mining giant Vale, locking in cargo for eight new bulk carriers for 25 years as South Korea's largest container shipper expands stable earnings outside its mainstay container business.
The agreement is HMM's third major long-term contract with Vale following two 10-year deals signed in May and September last year worth a combined 1.07 trillion won, the South Korean carrier said Tuesday.
Under the latest contract, each vessel will operate for 25 years beginning in 2030.
The contract is worth 4.697 trillion won, equivalent to 43.13 percent of HMM's consolidated revenue of 10.89 trillion won in 2025, according to a regulatory filing.
The agreement runs from April 1, 2030, through Oct. 31, 2056, although each vessel will operate under a 25-year contract from the time it enters service.
Vale also has an option to extend the contract by up to five years. The deal marks HMM's third major long-term contract with Vale following two 10-year agreements signed in May and September last year worth a combined 1.07 trillion won.
HMM had announced in June that it would order eight 210,000-ton Newcastlemax bulk carriers for the contract, equipped with the world's first engines capable of running on methanol, ethanol and conventional fuel oil. The ships will also be built "LNG- and ammonia-ready," allowing future conversion to liquefied natural gas or ammonia propulsion.
They will carry rotor sails that harness wind to supplement engine propulsion, among other equipment designed to improve fuel efficiency and reduce carbon emissions.
The deal advances HMM's effort to reduce its dependence on volatile container freight rates by expanding long-term contracts with large, creditworthy cargo owners.
Since CEO Choi Won-hyuk took office at the end of March last year, the carrier has sought to streamline its bulk shipping fleet while reducing its reliance on short-term chartered vessels and securing more long-term cargo commitments.
HMM's bulk division posted operating profit of 240 billion won in the first half of this year, extending a sharp improvement that began in the fourth quarter of 2025.
The carrier has also broadened its non-container portfolio beyond conventional dry bulk carriers and tankers into liquefied-gas carriers, pure car and truck carriers and multipurpose vessels.
Its bulk fleet expanded to 61 vessels as of the first half of this year from 44 at the end of March 2025.
"HMM will continue strengthening its stable earnings base by expanding the share of long-term contracts and restructuring its business portfolio, while expanding businesses centered on high profitability and future growth," a company official said.
Under the latest contract, HMM will transport cargo mainly between Brazil and destinations including China. Payments will be made within 10 business days after loading for each voyage.
The final contract value could change depending on exchange rates, fuel prices, shipping routes and vessel operating days, HMM said.
HMM shares were down 1.86 percent at 21,150 won as of 1:40 p.m. Tuesday.
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