Tank Barge Market Report - April 2020

Following is a breakdown of both foreign and U.S. tank barges officially on the market and available through Marcon. Not included are those barges not officially on the market, which we may be able to develop on a private and confidential basis.

Of the 3,667 barges and 13,543 vessels we currently track, 668 are tank barges with 24 inland and 21 ocean or coastal barges officially on the market for sale. The 24 inland tank barges were built between 1943 and 2009, with ten or 41.7% 25 years of age or over. The oldest inland tank barge listed today is a 76 year old, 9,000BBL tank barge previously used for transporting #2 oil in the U.S. Great Lakes. This old lady is counterbalanced by two U.S.-flagged 2009-built 1,600mt capacity tank barges located on the U.S. Gulf Coast. Seven double hull inland barges listed in the Americas from 11,066-28,000BBL capacity were built after 2005. One year ago, 25 inland barges were available with an average age of 26 years and five years ago, 24 inland barges were available with an average age of 27 years. The inland barges currently available for sale average 24 years old. Excess barges continue to sit on the market, with the continuation of scraping or selling for conversion to deck service of older units.

Of the 21 ocean/coastal barges, four are 10 years of age or less. Eleven or 52.4% of the ocean & coastal barges are at least 25 years old with the oldest one, a U.S. flagged, double-hull, 184,000BBL barge, built in 1975 and retrofitted in 2003. This is countered by a 2016 built foreign flagged 38,000BBL double hull barge. In May 2015, 46.9% of the 32 ocean and coastal barges listed for sale were 25 years of age or over, with the oldest barge being a 1961-built 30,000BBL barge in the U.S. Today, 11 fewer ocean/coastal barges are officially available for sale compared to five years ago and 13 fewer from one year ago. Average age of all ocean/coastal barges for sale today is 25 years old (1995), compared to 23 years last year (1996) and 25 years five years ago (1990). The closeness in average age suggests that while older barges have been disposed of, relatively younger units are coming onto the market for sale.

Seventeen inland tank barges which Marcon today has listed for sale are located in the U.S., followed by four in Europe and one each in Africa, the Mediterranean and location unknown. Seventeen ocean / coastwise barges listed for sale are in the U.S., followed by two in Southeast Asia and one each in the Far East and in Latin America. Thirty-five of the 45 tank barges listed for sale worldwide are double hull. Twenty-six of these are U.S. flag of which 16 are 11 - 25 years old and the remaining ten barges are 27 - 55 years of age. The foreign double-hull barges range from four years old in the Far East up to 62 years old in the Mediterranean.

Marcon's Market Comments
The first quarter and to date second quarter 2020 have been a time of hope and despair for most of the tank barge market. The situation with respect to the rapidly collapsing oil prices created opportunities for storage offshore, but it was our experience as brokers that this was scattered and mostly resulted in large offshore tanker charters versus sales of any US tonnage into the storage market. As brokers, we found that there were plenty of inquiries, but mostly for six month charters and potential foreign storage jobs. These jobs did not really look to last long enough to absorb the several retiring US Flag tank barges in the 100,000 BBL+ category that were coming out of service due to Class renewals, and also ballast water treatment system installation requirements. Scrap prices fell to extremely low levels as well (US $80/LDT and lower) in the US Gulf market, and required cleaning costs surpassed scrapping values, so that the "Buyers" of this tonnage were chasing a rising tide of costs against value that didn't equate to much action in the segment. Smaller double hull tank barges are available, but mostly offered for sale only out of the US market. In this instance we are seeing several larger double hull US Flag Tank Barges headed for the breakers.

Seasonal spring high water levels and flooding slowed the inland market's activity. Refineries and petrochemical plants were forced to reduce their output activity, mostly due to an overall decreased demand in the market for crude oil and refined products. It can be expected that this low volume will persist until 'normal' economic activity resumes. Kirby Corp. reported in May 2020 that its utilization levels in the inland market were still in the 90%+ range, but this looks to decline if current trends of a stuttered and uncoordinated re-opening of the economy drive refineries and petrochemical plants to continue reducing production volumes. Supply chains and demand were curbed mainly due to the Covid-19 shutdowns, which effectively decimated the US economy throwing tens of millions of people onto unemployment rolls and collapsing demand for the foreseeable future. Tonnage far surpasses demand and it will take time for things to sort themselves out to return to a more predictable and consistent market.

 

Commercial Marine Brokers since 1981