Nippon eyes Valemax deal

Japan's biggest steelmaker may pursue a deal to charter more Valemax bulkers to cut costs.

A senior official at Nippon Steel & Sumitomo Metal Corp said the company could start talks on a contract for the vessels with Brazilian miner Vale.

Nippon has used the ships seven times in the past, but the move would signal a more settled arrangement.

"We may enter formal negotiations on a freight contract once Kashima gets permissions from authorities and we confirm our plants are ready to receive the ships," Toshiharu Sakae, Nippon Steel's managing executive officer, told Reuters.

Nippon Steel buys about 70mt of iron ore a year, of which 25% comes from Vale, the company’s second-biggest iron ore supplier after Rio Tinto.

The 400,000-dwt ships could cut Nippon Steel's shipping costs by at least $400,000 per cargo.

The move would be a boost for Vale, whose Valemax bulkers were barred from China in 2012.