Baosteel and China Shipping Signed "JV Framework Agreement" and "Contract of Affreightment"

On Feb. 21, Baosteel Group Corporation and China Shipping (Group) Company held the signing ceremony for "Shipping JV Framework Agreement" i.e. "Contract of Affreightment" in Shanghai. Based on the cooperation in transportation business for so many years, both parties decide to set up a joint venture with assets as the tie, which creates a new platform for the joint development of both parties and further deepens and closes up the cooperative relationship between both parties.

Baosteel's Chairman Xu Lejiang, Vice Chairman and Party Secretary Liu Guosheng, Vice President He Wenbo and Ma Guoqiang, China Shipping's President Li Shaode, Party Secretary Ma Zehua, Vice President Lin Jianqing and Zhang Guofa, etc. attended the signing ceremony.

As the most modernized and largest steel conglomerate in China, Baosteel imported nearly 34 million tons of iron ore in 2007. While China Shipping as one of the strongest shipping conglomerates in China owns 436 ships with 17.68 million tons of dead weight, and large specialized fleets of 300,000 tonnage and 230,000 tonnage, etc.

, its annual transportation volume exceeds 370 million tons. Baosteel and China Shipping have enjoyed a good cooperative relationship for many years, and China Shipping has rendered important transportation support and shipping capacity guarantee for Baosteel's raw material supply and import & export trading for a long time.

In recent years, both parties keep developing the channels for cooperation in shipping and expanding the space for cooperation. In January last year, Baosteel and China Shipping introduced the cooperative transportation method of COA and signed the long-term contracts for ocean-going and coastal transportation, further enhancing both parties' cooperative relationship in the field of ocean-going transportation for iron & steel, raw material and fuel.

He Wenbo and Zhang Guofa signed "JV Framework Agreement" on behalf of both parties. According to the agreement, both parties will cooperate with Baosteel Trading Co., Ltd. and China Shipping Development Co., Ltd. as the vehicles. The new JV will provide 2 ore carriers of 300,000 tonnage and 4 ore carriers of 230,000 tonnage for Baosteel to transport the imported iron ore.

By the end of 2015, JV's total shipping capacity will reach approximately 3 million tons of dead weight. At the same time, both parties also signed "Contract of Affreightment" for the long-term transportation of imported iron ore.

In his speech, Li shaode expressed that China Shipping and Baosteel, after many friendly negotiations, have advanced from business cooperation to assets cooperation, which is also the fruit of the friendly cooperation between both parties for so many years. In light of the principles of mutual benefit and long-term development, both parties will jointly operate the JV and further expand the field for cooperation. He expressed that China Shipping will execute the requirement for modern service industry to serve the cargo owner, and provide better service for Baosteel's development.

Xu Lejiang thanked China Shipping for its long-term support to Baosteel's development in his speech. He said, in the background of continuous hike of the international iron ore transportation cost nowadays, it is of profound significance for Baosteel to sign the agreement with China Shipping to carry out long-term cooperation in the perspective of strategic cooperation. The upcoming 5 years will witness Baosteel's leaping development. The marriage between Baosteel and China Shipping this time will generate a positive impact on the joint development of steel industry and shipping industry in China. Baosteel will spare no effort in its support to JV's development, expand the field for both parties' cooperation and expedite the common development.