TOKYO -- Nippon Yusen Kabushiki Kaisha (NYK), Japan's largest shipping line, said it has signed a 40-billion yen ($336 million) contract with Brazil's Companhia Vale do Rio Doce to transport iron ore from the South American country to China over 20 years starting in 2011.
The carrier will carry 1.3 million tons of iron ore annually for CVRD, the world's largest producer of the material, from three ports in Brazil, including Tubarao and Ponta da Madeira, to four ports in China, including Shanghai, Dalian and Qinhuangdao, Atsushi Matsumoto, a spokesman for NYK, said Tuesday.
The previous longest contract for NYK with a resources customer was five years. NYK and other shipping lines have signed long-term contracts to secure rates that have more than doubled over the past year on rapidly growing global demand for raw materials, especially by China.
The carrier said it will place an order with Kawasaki Heavy Industries Ltd.'s Chinese venture for a 300,000-ton ore carrier, costing about $84 million, to shuttle four to five times a year between Brazil and China. The CVRD ore will be supplied primarily to small- and medium-sized Chinese steel makers.
Brazil's CVRD is the largest logistics service provider in Brazil, where it owns and operates a number of railroads and port terminals.