PAN Ocean Co has entered into a 27-year contract of affreigtment (COA) with Vale International SA for the transportation of Brazilian iron ore at estimated total sales of approximately USD 1.8 billion.
While the contract commences from the first quarter of 2020, the company will invest in the construction of six very large ore carriers (VLOCs). Pan Ocean has earmarked KRW 483.1 billion (USD 444 million) to finance the order.
The first ship from the batch is scheduled for delivery in December 2019, while the final one from the series is set for completion and delivery in September, 2021.
The COA will secure a stabilised source of revenue and profit for the shipping company. Details on the potential yards to be entrusted with the construction work were not disclosed.
Pan Ocean reported a 55.4 per cent rise in profit for the third quarter of 2017 when compared to the third quarter of 2016. The Q3 profit for this year stood at USD 36.9 million against USD 23.7 million reported in Q3, 2016.
The increase was attributed to demand growth related to iron ore and coal in China driven by the steady development of the country’s economy.
Sea News, November 30