Norway’s Klaveness Combination Carriers (KCC) is expecting a big jump in tanker trades this year for its versatile vessels.
The Oslo-listed owner is taking advantage of strong wet markets as earnings grow.
Preliminary time charter equivalent (TCE) earnings for its Cabu caustic soda and dry cargo ships were $25,800 per day in the fourth quarter.
For the Cleanbu oil product/dry cargo vessels, the figure was $36,800 per day.
This gave an average of $31,500 for the fleet, within the previous guidance range of between $30,200 and $31,700.
“Earnings were positively impacted by a continued strong tanker market, but a weaker than expected dry bulk market had negative effects,” KCC said.
During the last three months, several caustic soda shipment contracts were secured for 2023 at strong earnings.
This creates a solid base for the Cabu earnings for 2023, KCC said.
Caustic soda cargo bookings are already 10% higher so far in 2023 compared to last year.
Capacity covered?
Expected additional bookings should cover the full tanker capacity of KCC’s Cabu fleet for the year, the company believes.
Three in four caustic soda shipments are fixed-rate contracts in 2023, with average TCE earnings around 2.5 times better than in 2022.
Tanker trading of the Cleanbu fleet will substantially increase in the first quarter, potentially to 80% of trading days, compared to 49% in the fourth quarter of 2022, KCC said.
In November, chief executive Engebret Dahm said operating the vessels in both wet and dry trades is usually the best approach.
But this is not a hard and fast rule, particularly when product rates are so buoyant and bulkers are weaker.
“When we get efficient trading in dry with limited waiting time, it more or less always pays to go in to do the dry bulk trading instead of ballasting,” he told a conference call.
“But again, there will be instances where there will be waiting time for the dry cargo, which dilutes our efficiency advantage,” the CEO added.
Dahm explained that the company may from time to time go straight into the tanker market with its vessels.
Full financial results for the company are due next month.
