Levels of secondhand tug sales were impacted by the worldwide coronavirus pandemic, but are improving as owners raise funds for newbuilds
Tug sales and purchase (S&P) markets are increasing as owners continue to modernise their fleets by raising funds for newbuilds after the Covid-19 pandemic slowed purchases worldwide.
A similar number of tugs are available to purchase globally in Q2 2021 as in Q4 2020, with more available than in early 2020, demonstrating that owners are willing to part with older vessels to fund newbuilding orders.
Marcon International tracks 5,203 tugs worldwide, of which 615 are officially on the market for sale. This is close to the 616 tugs for sale recorded in Q4 2020, up from 605 tugs for sale in Q2 2020 and from 540 tracked in Q2 2019.
The biggest rise in tugs for sale since the end of 2020 is in South America, where there were 43 for purchase in Q2 2021 compared with 30 in Q4 2020.
This could be down to towage service consolidation in the region and more newbuildings being introduced as ports bolster their ship manoeuvring capabilities.
A recent example is the purchase of Sanmar’s 2020-built harbour tug Bogocay XL by SAAM Towage. This 24.4-m tug was renamed SAAM Palenque and started its route to begin towage services in Panama in August 2021.
A recent example is the purchase of Sanmar’s 2020-built harbour tug Bogocay XL by SAAM Towage. This 24.4-m tug was renamed SAAM Palenque and started its route to begin towage services in Panama in August 2021.
According to Marcon, 125 tugs are for sale in the US - similar to the number (128) a year ago, with virtually no change year-on-year in southeast Asia (118), and 74 in the Mediterranean - down from 90 in Q2 2020.
The Washington-headquartered shipbroker says there are 65 tugs in the Far East and 64 in Europe for sale. In the Middle East there are 59 tugs for purchase, 21 in the South Pacific, 16 in the Caribbean, 11 in Africa and 19 around the rest of the world.
It is not just older tugs for sale. 22.8%, or 140 of the tugs worldwide were built within the last 10 years. On the other hand, 84 tugs, representing 13.7% are more than 50 years old.
Marcon says it closed six sales and one charter to May 2021 after ending 2020 with 22 sales and charters completed. Its sales were slowed by the Covid-19 pandemic through 2020 and into this year.
“The market was extremely slow, but we are starting to see a pickup in inquiries as the world is slowly reopening and have multiple sales pending,” Marcon says.
However, it says there is still a long way to go. “We still see a lot of uncertainty in the market and price reductions for many classes of vessels and barges have not been enough to overcome buyers’ hesitancy.”
“We are hopeful a rebound is emerging as more people are vaccinated, Covid-19 slowly subsides and economies turn around with strong fiscal stimulus.”
Most of the tugs for sale in Marcon’s database, 397 representing 64.6%, have conventional twin-screw propulsion. 132 tugs have azimuth drives, 56 are single screw, 21 have Voith Schneider propulsion and nine are triple screw.
“As we have been watching the past several years, azimuth stern drive tugs increased their position in the market, further reducing conventional twin screws,” says Marcon in a newsletter, “while single-screw tugs have been mostly relegated to nearly zero commercial work, except in certain specific cases.”
Marcon’s database of tugs for sale highlights the changing power range of vessels with 54 fewer tugs listed in the 2-3,000 hp range and 24 fewer tugs with less than 2,000 hp than in Q2 2020.
There are 12 tugs more for sale in the 4-5,000 hp range, three more in the 5-6,000 hp, six extra in the 6-7,000 hp and seven more tugs in the 7-8,000 hp range.
More tugs are being scrapped. Sea-Web reports 1,588 tugs worldwide were scuttled, broken up or are to be broken up, up from 1,544 in Q2 2020.
“We believe this will increase over the next year as companies are dealing with the economic fallout of the Covid 19 pandemic in various sectors of the market,” says Marcon.
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