Jiangsu Province-based Chinese company Shagang International Trade Corporation has announced that it has signed a 10-year purchase contract with Switzerland-headquartered Ferrexpo Group whose main interests are in Ukrainian iron ore assets. Under the contract, Ferrexpo Group is to ship a total of 3 million mt of pellets to Shagang International Trade over the next ten years, from April 1, 2010 to March 31, 2019. The agreement includes delivery of 28,000-35,000 mt per year of prime grade pellets to Shagang Group until the contract expires.
In 2007, the two companies had inked a three-year supply contract for a total delivery of 84,000 mt of pellets. Ferrexpo Group is one of the world's largest pellet manufacturers. In 2009, Ferrexpo's yearly production of pellets was 9 million mt, with 90 percent destined for the export markets.
Despite the frequent fluctuations seen in the global raw material markets in the past few years, Shagang Group has succeeded in securing provisions of raw materials such as iron ore and coking coal through strategic cooperation with domestic and overseas suppliers.