NYK Inks Long-Term Contract for Iron Ore Transport to China's Baoshan Iron & Steel
November 10, 2003
NYK Line has recently concluded a long-term contract with Baosteel International Economic & Trading Corporation Ltd. of Shanghai to transport iron ore from Australia to Baoshan Iron & Steel Co., Ltd., China's biggest steelmaker.
Details are as follows:
| Contract period | : | 10 years |
| Transport quantity | : | 1.5 million to 2 million tons per year |
| Start of transport | : | The beginning of 2005 |
| Transport vessel | : | NYK-operated Cape-size bulker for continuous service from Western Australia to China |
Baoshan Iron & Steel has been importing iron ore mainly by concluding spot or short-term C.O.A. contracts with carriers. Nevertheless, against the background of China's fast-swelling iron ore imports, the steelmaker is also starting to introduce long-term contracts for stable transport. NYK's recently signed contract is the first 10-year contract of its kind to be concluded with the Chinese steelmaker by a Japanese carrier.
(Previously, a seven-year contract concluded by Daiichi Chuo Kisen Kaisha was of the longest duration. Iron ore transport under this contract started in 2002.)
Baoshan Iron & Steel's crude steel production is put at about 20 million tons per year (as of 2002) - an extraordinary volume considering other Chinese steelmakers' output of about eight million to nine million tons.
Baoshan Iron & Steel's desire to secure stable shipping against the backdrop of China's fast-increasing iron ore imports happened to fit in well with NYK's intention of stepping up the global expansion of bulk and energy transport services in line with its "Forward 120" medium- and long-term management vision in addition to Japan-related business which forms the core of NYK's operations.
NYK is set to further expand its overseas transport services with added vigor while maintaining and increasing its Japan-related services.