On October 19, major Chinese mill Wuhan Iron and Steel (Group) Corporation (WISCO) signed a long-term iron ore transport contract with the country's largest marine transportation company, China Shipping Group (China Shipping).
According to the contract, China Shipping will provide three cargo vessels of 230,000 ton capacity and two cargo vessels of 300,000 ton capacity in order to deliver five million tons of iron ore every year for a period of 20 years.
Feeling the effects of the sharp increase in freight rates this year (the producer imports approximately 80 percent of the iron ore it consumes), WISCO has decided to stabilize its long-term shipping costs. For this purpose, the company has also signed long-term transportation contracts with China Ocean Shipping Company (COSCO) and Zodiac Maritime Agencies Ltd.
WISCO's steel production capacity is expected to exceed 30 million mt by the end of 2010.