Supply & Tug Supply Boat Market Report - February 2018

Following is a breakdown of available supply and tug supply vessels we currently have as shipbrokers officially listed for sale worldwide. Not included are those available on a private and confidential basis.

Of 13,327 vessels and 3,819 barges tracked by Marcon, 3,250 are supply and tug supply boats, with 321 officially on the market for sale. 83.69% of foreign and 80.68% of U.S. flag supply / tug supply boats Marcon has officially listed for sale are direct from Owners. 2018 to date, actual sales price of all vessels and barges sold by Marcon International averaged 64.82% vs. 2017's 81.49% and 2016's 91.70%. Several sales so far this year are at just above scrap levels, reflecting a growing difference between vessel book values, which recently is the usual basis for asking prices, and what buyers are willing to pay.

Market Overview

Tug supply boats officially on the market for sale in total is 156, 11 more than one year ago in February 2017 but 36 less than February 2013. Composition in the last year has changed with the biggest shifts being six more 5-6,000HP, four more each 6-7,000HP and 10-12,000HP and six fewer less than 3,000HP AHTSs offered. In today's market many additional vessels, probably equal to or greater than the number "officially" listed can be developed on a private & confidential basis - just a phone call or e-mail away. The good news for potential serious buyers, the few out there, is that vessels now offered for sale generally average several years newer than those five years ago. This is due partially to continued scrapping of older tonnage and primarily because Owners are laying-up and looking to dispose of select idle / under-utilized tonnage or non-core assets because of the present and potential future market conditions. At the time of this report, 75 tug supply boats officially for sale were either built within the last 10 years or are newbuilding re-sales. Only 19.23% of tug supply boats currently for sale are 25 years of age. Counter-balancing today's "old ladies" are three newbuilding AHTS resales, in the 5,150-12,000BHP range, scheduled for delivery in 2018. One year ago, 25.85% of AHTSs for sale were built before 1993 and five years ago 67.71% of the tug supply boats were built prior to 1989. These decreases in percentage of the fleet over 25 years of age further support the younger ages referred to above. In addition to our published listings, other vessels not officially on the market may be developed on a private and confidential basis.

Over the past year, we have seen a continuation of all sizes of PSVs coming officially on and off the market with a net increase of 32 PSVs listed for sale. The greatest changes are 12 more 240'+ with an average year built of 2007 vs 2004, nine more 150'-160' (1998 vs 1992) and six more 190'-200' (2003 vs 2004) PSVs presently on the market. Like the anchor handling tug supply boats, PSVs now being offered are generally newer than those offered back in February 2013. As of the time of this latest report, Marcon International officially has available 44 supply boats built within the last ten years, which includes three newbuilding re-sales scheduled for delivery in 2018. 40 PSVs, or 24.24%, are 25 years of age or older, with the oldest PSV listed built in 1964 - compared to one year ago when 39 PSVs (29.32%) were older than 25 years with the same oldest 1964-built PSV. Five years ago, the oldest PSV on the market for sale had been built in 1966, but 75 PSVs (60.98%) were older than 25 years. As with the AHTSs discussed above, PSV owners have found themselves in the same unenviable situation of too many boats and too little work.

In addition to those for sale, Marcon has 134 straight supply and tug supply vessels listed for charter worldwide, nine less than one year ago, but there are many more in today's market idle and hungry for employment.

The dominant location for second-hand tonnage on the market February 2018 is the U.S. with 31.2% (up from 28.9% one year ago and 18.7% five years ago) followed by Southeast Asia with 23.1% (up from 21.8% one year ago and 19.4% five years ago), Far East with 12.8% (up from 10.0% last year and 10.2% in 2012) and the Mid-East with 8.7% (down from 11.1% last year and 11.7% five years ago). Where location is unknown is 2.2%. The rest of the globe makes up the final 22.1% of locations.

CAT is the principal main engine suppliers to this sector powering 110 of the supply & tug supply vessels listed for sale, followed by Cummins in 40 and EMDs in 30 vessels. Wartsila leads foreign manufacturers with 29, then Niigata with 25, Yanmar in 18, 13 each with Bergen and MAK and 43 units powered by various other manufacturers. The biggest shift in engines over five years ago is that CAT powers 34.3% now vs 17.8% in 2012.

Commercial Marine Brokers since 1981

Supply Boat - February 2018 Market Report.pdf