P.O. Box 1170, 9 NW Front Street, Suite 201 Coupeville, WA 98239 U.S.A. Marcon International, Inc. Telephone (360) 678 8880 Fax (360) 678-8890 Vessels and Barges for Sale or Charter Worldwide E Mail: [email protected] http://www.marcon.com August 2016 Tug Market Report 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. Horsepower Under 1,000 – 2,000 – 3,000 – 4,000 – 5,000 – 6,000 - 7,000 – 8,000 – 9,000 Total 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Plus Jan 2000 161 145 72 62 27 15 3 4 7 2 498 Jan 2001 138 133 81 72 34 20 5 7 8 2 500 Jan 2002 117 134 85 67 38 22 2 5 6 4 480 Jan 2003 152 176 96 71 40 21 2 4 6 5 573 Jan 2004 117 140 77 67 29 21 1 5 12 3 472 Jan 2005 117 141 71 69 28 21 1 11 9 2 470 Jan 2006 97 125 90 66 21 16 5 6 8 1 435 Jan 2007 77 114 97 68 25 10 5 4 7 0 407 Jan 2008 73 118 105 58 19 13 2 7 1 1 397 Jan 2009 73 94 95 76 29 19 6 5 2 3 402 Feb 2010 74 136 121 125 47 36 9 7 3 4 562 Feb 2011 66 111 137 142 80 47 10 15 8 5 621 Feb 2012 75 133 132 153 81 45 14 17 7 1 658 Feb 2013 92 166 167 153 73 34 17 15 8 2 727 Feb 2014 86 151 184 136 63 38 13 9 5 2 687 Aug 2014 78 117 170 131 69 34 11 6 6 1 623 Nov 2014 74 120 168 135 67 35 10 9 8 1 627 Feb 2015 74 117 163 134 66 38 15 8 7 0 622 May 2015 66 121 150 147 70 44 16 9 6 3 632 Aug 2015 65 123 168 133 64 46 17 8 6 5 635 Nov 2015 71 123 179 124 64 42 17 8 7 5 640 Feb 2016 66 114 164 127 69 41 17 6 4 6 614 May 2016 65 113 168 133 71 42 17 7 2 5 623 Aug 2016 55 108 161 153 79 43 19 10 4 5 637 Aug 2016 - U.S. 18 21 26 26 9 6 5 5 1 0 117 Aug 2016 - Foreign 37 87 135 127 70 37 14 5 3 5 520 Avg. Age - Worldwide 1980 1988 1989 1995 1999 2001 2002 1978 1999 1993 Avg. Age - U.S. 1959 1967 1967 1973 1981 1976 2006 1970 1991 0 Avg. Age - Foreign 1992 1993 1993 1999 2001 2006 2000 1985 2002 1993 Charter - Worldwide 19 47 56 63 38 21 9 6 9 17 285 Charter - U.S. 2 8 11 15 6 2 1 1 1 0 47 Charter - Foreign 17 39 45 48 32 19 8 5 8 17 238 Up Since Last Report Down Since Last Report Market Overview Of the 13,121 vessels and 3,816 barges that Marcon currently tracks, 4,945 are tugs with 637 currently officially on the market for sale worldwide, up 2.25% since May and 0.32% from August 2015. Of the tugs for sale, 55.19% of foreign and 96.58% of U.S. tugboats are direct from Owners. 217 or 34.07% of the tugs worldwide, primarily foreign flagged, were built within the last 10 years, are newbuilding re-sales or currently under construction – compared to 35.75% one year ago. 64 (10.05%) are over 50 years of age. Thirteen 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 25 newbuildings up to 8,076HP scheduled for delivery in 2016. www.marcon.com Details believed correct, not guaranteed. Offered subject to availability. Marcon International, Inc. Tug Boat Market Report – August 2016 The majority of tugs Marcon tracks for sale as of the time this report is being written are in Southeast Asia with 134 tugs officially on the market (131 last report), followed by 116 in the U.S. (123), 78 in the Mid-East (69), Europe with 71 (65), 69 in the Far East (66), 55 in the Mediterranean (55), 25 in the South Pacific (27), 23 in Latin America (21), 19 in the Caribbean (18), 15 in Africa (20), 15 in Canada (14), 9 where location unstated (6) and 8 in Southwest Asia (8). CAT diesels still power most tugs for sale with machinery in 150 or 23% of the tugs Marcon lists. This is followed by 90 Cummins, 63 EMD, 55 each Niigata and Yanmar, 24 each Deutz-MWM and Mitsubishi, 23 GM/DD and 19 Wartsila powered tugs. 134 tugs are powered by machinery from other manufacturers from ABC to Zibo with, as always seems, five Fairbanks Morse boats still on the market. In tugs listed for sale since August 2011, CAT and Yanmar powered vessels are up 5 percentage points each, Niigata is up 3 points, Mitsubishi and Wartsila 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 31.45% of the tugs worldwide, primarily foreign flag, were built within the previous ten years compared to 34.07% today. The United States also then had the largest selection of tugs listed for sale with 145 available (24.1%) tracked by Marcon (plus nine additional U.S. flag tugs overseas). 102 tugs were located in Southeast Asia (17.0%), 93 tugs in Europe (15.5%), Far East 87 (14.5%), Mediterranean 65 (10.8%), Mid-East 35 (5.8%) and Caribbean 24 (4.0%). Looking at types of tugs available for sale worldwide, conventional twin screw tugs still prevail today with 382 (60.0%). These are followed by 148 azimuthing tugs (23.2%) on the market, 92 single- screw tugs (14.4%), 12 Voith Schneider tractor tugs (1.9%) and three triple screw (0.5%). As a comparison and demonstrating the trend in propulsion, five years ago 20.0% of the 601 tugs for sale were single screw, 60.1% twin screw, 16.1% azimuthing and 3.3% were Voith Schneider. More ASD tugs are being listed for sale worldwide than single screw tugs. The scrapping of older single screw tugs continues as they are seldom able to be sold for further commercial trade. The greatest global changes in horsepower for sale in the last five years have been in the 2,000 – 2,999HP range with 40 tugs more available today with an average age of 27 years compared to August 2011 when the average age of the 121 vessels listed was 28 years. Tugs in the 3,000-3,999HP range increased by 21 from five years ago. Average age stayed at 21 years, with average build date now of 1995. There are also thirteen more 4,000 – 4,999HP tugs today (17 years vs. 19 years). There are 25 fewer under 1,999BHP and 13 fewer 7,000-7,999BHP tugs on the market today. Actual sale prices of all vessels and barges sold by Marcon to-date has averaged 95.49% 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%. Five tugs were sold so far in 2016 with an average price per BHP of $291.94 and average age of 36 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 four U.S. sales with ages ranging from 19 to 50 years. We continue to see updates about vessels scrapped or repossessed and we believe that 2016’s uptick in $/BHP is temporary due to the specific vessels and that prices, especially for older vessels, will continue to decline for the next few years. 2 www.marcon.com Details believed correct, not guaranteed. Offered subject to availability. Marcon International, Inc. Tug Boat Market Report – August 2016 Recent Marcon Tug Sales & Charters Out of thirteen sales so far this year, Marcon has sold five tugs totaling 7,690HP and one 1,360HP inland river pushboat. Two additional tugs are under offer and expected to close within the next 45 days. Three 5,000+ HP twin screw and ASD tugs continue to be fixed on previously arranged long-term charters in the U.S.