Steady development in the service markets
Service market development was stable during the first quarter of the year. The strong demand for long-term service agreements supported activity in the marine markets, despite continued challenges in the offshore and merchant segments. The demand for power plant related services was steady, with positive developments in the Middle East and Asia.
Positive activity in the power generation market
The demand for Wärtsilä’s power generation solutions was healthy in the first quarter of 2017. The growing need for electricity in the emerging markets, and the requirement to balance intermittent renewable sources in certain industrialised countries, drove investments in new generation capacity. While these trends are expected to continue to support market activity this year, geopolitical and macroeconomic uncertainty remains a risk.
Energy Solutions’ market share
In 2016, global orders for natural gas and liquid fuel power plants of up to 500 MW was stable at 26.1 GW (26.2). Wärtsilä's market share increased to 13% (8). Global orders include all gas turbine and Wärtsilä orders with prime movers over 5 MW in size.
Marine market environment continues to be soft
During the first quarter of 2017, 145 contracts for new vessels were registered (77). Despite a gradual improvement in freight rates in the conventional merchant markets, overcapacity and low oil and gas prices continue to burden the marine industry. Nevertheless, activity remained on a good level in the cruise segment, thanks to the growing interest in cruise travel in the USA and Asia. Contracting developed well also in the ferry and Ro-Ro segments, supported by healthy earnings, ageing fleets, planned regulatory developments, and attractive newbuilding prices.
In terms of compensated gross tonnage, China remained the largest shipbuilding nation in the first quarter with 29% of all confirmed contracts. South Korea’s share was 23% and Italy’s 16%. Low vessel contracting volumes are likely to continue to result in the consolidation of yards in the major shipbuilding countries.
Marine Solutions’ market shares
Wärtsilä’s share of the medium-speed main engine market was 45% (51% at the end of the previous quarter). The market share in auxiliary engines increased to 20% (18% at the end of the previous quarter), thanks to Wärtsilä’s focus on this product area. Wärtsilä is also well positioned in other key product and solution areas, such as electrical and automation systems and gas systems.