Moderate activity in power generation markets
Power plant market activity slowed during the review period. Activity in power plant quotations remained stable during the third quarter, with a continued focus on natural gas based generation. Supported by their economic growth, demand in the emerging markets for power generation capacity continued. However, the significant exchange rate fluctuations in multiple emerging market currencies have caused delays in customer decision-making. Volatility in the macro economy continues to delay investment decisions in the power generation markets overall.
Power Plants market share
During the first half of 2013, global orders for natural gas and liquid fuel based power generation (including all prime mover units of over five MW) totalled 18.8 GW, a decrease of 35% compared to the corresponding period last year (28.8). Wärtsilä's share represents 5.8% of the market (4.9%).
Good activity in all major vessel segments
During the third quarter of 2013, 396 contracts for new vessels were registered. Thus far in 2013, 1,341 vessels have been contracted globally. Market activity has improved significantly compared to 2012, when the average quarterly volume for known contracts was 273 vessels. Ordering has been active in all major vessel segments, resulting in a more evenly spread contracting mix compared to 2012.
This year, counter-cyclical ordering has played an important role, with competitive newbuilding prices and the increased fuel efficiency of modern vessels attracting investments in merchant vessels. Notable activity has been seen in the product tanker, LPG carrier, and large containership segments. The gas carrier market (LNG carriers and LPG carriers) has recorded 116 contracts thus far in 2013. Contracting in the offshore sector has also remained active. The contracting of mobile drilling units has been positive, and there has been active ordering of jack-up rigs. The drillship market remains solid, although activity is lower than the high level of contracting seen in 2012. There is also continued demand for mobile production units. Contracting volumes in the anchor handling tug supply and platform supply vessel segments have, however, been lower than in recent years.
China and South Korea captured respectively 39% and 36% of the contracts confirmed in 2013 in terms of compensated gross tonnage, whereas Japan secured 14%.
Ship Power market shares
Wärtsilä’s share of the medium-speed main engine market increased to 49% (47% at the end of the previous quarter). The market share in low-speed engines decreased to 10% (14%). In the auxiliary engine market, Wärtsilä’s share increased slightly to 5% (4%).
Stable development in the service markets
Service market activity continued to be stable during the third quarter of 2013. European marine markets remain challenging, while the demand for services to LNG carriers has developed well. Service activity was healthy in the Americas and Africa. The demand from IPP and utility customers for power plant related services has remained at a good level.