Tug Boat Market Report - May 2016
Following is a breakdown of available anchor handling coastal, ocean and harbor tugs. Separate reports available on inland river pushboats and anchor handling tug supply vessels.
Market Overview
Of the 13,084 vessels and 3,860 barges that Marcon currently tracks, 4,936 are tugs with 623 currently officially on the market for sale worldwide, up 1.47% since February and down 1.42% from May 2015. Of the tugs for sale, 53.39% of foreign and 95.04% of U.S. tugboats are direct from Owners. 201 or 32.26% of the tugs worldwide, primarily foreign flagged, were built within the last 10 years, are newbuilding re-sales or currently under construction - compared to 35.94% at last November's report. 70 (11.24%) are over 50 years of age. Eight have no age listed. The oldest tug Marcon currently has listed was built in 1912 and is very last of over 1,000 first generation steam trawlers and halibut fishers. This "old lady" is balanced by 15 newbuildings up to 8,076HP scheduled for delivery in 2016.
The majority of tugs Marcon tracks for sale as of the time this report is being written are in Southeast Asia with 131 tugs officially on the market (142 last report), followed by 123 in the U.S. (118), 69 in the Mid-East (51), 66 in the Far East (76), Europe with 65 (65), 55 in the Mediterranean (60), 27 in the South Pacific (30), 21 in Latin America (29), 20 in Africa (23), 18 in the Caribbean (15), 14 in Canada (13), 8 in Southwest Asia (8) and 6 where location unstated (10). CAT diesels still power most tugs for sale with machinery in 152 or 24% of the tugs Marcon lists. This is followed by 86 Cummins, 57 EMD, 55 Yanmar, 54 Niigata, 25 Deutz-MWM and Mitsubishi, 24 each GM/DD and 19 Wartsila powered tugs. 126 tugs are powered by machinery from other manufacturers from ABC to Zibo with, as always seems, six Fairbanks Morse boats still on the market. In tugs listed for sale since May 2011, CAT and Yanmar powered vessels are up 5 percentage points each, Cummins and Niigata are up 2 points each and EMD is down 3 points.
There has been a definite shift in the second-hand tug market over the last few years with newer boats, many of which are ASDs out of Southeast Asia and the Far East, being offered for sale. Five years ago, only 30.63% of the tugs worldwide, primarily foreign flag, were built within the previous ten years compared to 32.26% today. The United States also then had the largest selection of tugs listed for sale with 151 available (24.0%) tracked by Marcon (plus seven additional U.S. flag tugs overseas). 108 tugs were located in Southeast Asia (17.1%), 102 tugs in Europe (16.2%), Far East 83 (13.2%), Mediterranean 73 (11.6%), Mid-East 33 (5.2%) and Caribbean 27 (4.3%). Another major shift in the marketplace is with the Southeast Asian second-hand tug market overtaking Europe and the U.S. in the number of tugs for sale in the region. As far as types go - conventional twin screw tugs still prevail today with 370 (59.4%) for sale worldwide. These are followed by 136 azimuthing tugs (21.8%) on the market, 103 single-screw tugs (16.5%), 9 Voith Schneider tractor tugs (1.4%) and five triple screw (0.8%). As a comparison and demonstrating the trend in propulsion, five years ago 21.7% of the 630 tugs for sale were single screw, 57.1% twin screw, 17.1% azimuthing and 3.5% were Voith Schneider. As we have been saying for a while many older single screw boats have lingered too long and are now being broken up. We now see more ASD tugs listed for sale worldwide than single screw tugs.
The greatest global changes in horsepower for sale in the last five years have been in the 2,000-2,999HP range with 26 tugs more available today with an average age of 28 years compared to May 2011 when the average age of the 142 vessels listed was 30 years. Tugs in the 3,000-3,999HP range declined by 11 from five years ago. Average age increased from 21 years to 22 years, with average build date now of 1994. There are also eight fewer 7,000-7,999HP tugs today (31 years / avg. build date 1985). Average age in 2011 in this horsepower range was 26 years.
Actual sale prices of all vessels and barges sold by Marcon to-date has averaged 90.86% of asking prices. In 2015 actual sales prices averaged 84.95% of asking prices, compared to 2014's 85.65%, 2013's 87.07% and 2012's average 81.79%. Four tugs were sold so far in 2016 with an average price per BHP of $279.18 and average age of 35 years. Five tugs were sold in 2015 with an average price of $243.20 and average age of 34 years. Seven tugs were sold in 2014 with an average price per BHP of $282.55 and average age of 41 years. These are lower than 2013's average price per BHP for a "generic" 33 year old twin screw tug of US$ 324.78. 2014 sales included both foreign and domestic tugs and actual ages covered a relatively narrow range from 32 to 47 years of age, whereas 2015's sales included one foreign and four U.S. sales with ages ranging from 8 to 50 years and 2016's to date include one foreign and three U.S. sales with ages ranging from 19 to 50 years. We continually see updates about vessels scrapped or repossessed and we believe that this first quarter 2016's uptick in $/BHP is only temporary due to the specific vessels and that prices, especially for older vessels, will continue to decline for the next few years.
Commercial Marine Brokers since 1981