Continued activity in gas based power generation markets
Power plant market activity was stable during the second quarter of 2013. The amount of quoted MWs was comparable to the previous quarter, with continued focus on natural gas based generation. Supported by their economic growth, the emerging markets continued to invest in new power generation capacity. However, the volatility in the macro economy continues to delay investment decisions in the overall power generation markets.
Power Plants market share
During 2012, global orders for natural gas and liquid fuel based power generation (including all prime mover units of over five MW) totalled 75.4 GW, a decrease of 25% compared to 2011 (100.8). Wärtsilä's share represents 4.2% of the market (3.3%).
Market activity showing signs of improvement
During the second quarter of 2013, 383 contracts for new vessels were registered. Thus far in 2013, 749 vessels have been contracted globally. Market activity has improved from 2012, when 490 vessels were contracted in the first half and the average quarterly contracting volume was 320 vessels. Competitive new building prices and the increased fuel efficiency of modern vessels have attracted investments in merchant vessels, although accessing financing is still a challenge. The gas carrier market (LNG carriers and LPG carriers) continued to be active with a total of 49 contracts registered during the first half of 2013. Contracting of offshore and specialised vessels remained active.
China and South Korea remain the dominant shipbuilding countries, capturing respectively 39% and 36% of the contracts confirmed in 2013 in terms of compensated gross tonnage (CGT), whereas Japan secured 13%. The remaining 125 orders, representing 12% of the contracts confirmed in CGT, were placed outside of these top three shipbuilding countries.
Ship Power market shares
Wärtsilä’s share of the medium-speed main engine market was 47% (48% at the end of the previous quarter). The market share in low-speed engines was 14% (15%). In the auxiliary engine market, Wärtsilä’s share remained at 4% (4%).
Stable development in the service markets
Service market activity was stable during the first half of 2013. Overall marine service activity was satisfactory. Europe continues to be the most challenging region. Development in the Americas remained favourable, especially in power plant services. Power plant service activity was also healthy in Africa. The demand from IPP and utility customers for power plant related services remained at a good level, while demand from industrial customers was somewhat lower.