Steady development in the service markets
Service market activity was solid in the period January-September, supported by continued demand for long-term service agreements in both end markets. In the marine markets, activity favoured the cruise segment, while the offshore segment remained challenging. Activity among merchant customers stabilised at a low level in the third quarter. The demand for power plant related service activities was steady.
Power generation markets shifting towards flexible technologies
The demand for Wärtsilä’s energy solutions was good in January-September. Electricity demand in the emerging markets continued to increase, particularly in Asia, and the growing share of intermittent renewable power sources in several developed markets supported interest in flexible generation capacity. The role of storage technology and hybrid solutions, including solar generation, is increasingly being discussed globally. These encouraging developments are counterbalanced by strong competition in the liquid and gas fuelled power generation markets, as well as by the potential impact of geopolitical and macroeconomic uncertainties.
Energy Solutions’ market share
For the twelve months ending in June, global orders for natural gas and liquid fuel power plants of up to 500 MW decreased by 13% to 24.8 GW (28.4 GW at the end of the previous period). Wärtsilä's market share was 14% (12). Global orders include all gas turbine and Wärtsilä orders with prime movers over 5 MW in size.
Improving market conditions supported vessel contracting
During January-September, 690 contracts for new vessels were registered (634). Despite slightly improved market conditions in the merchant segment, large order books and scheduled newbuilding deliveries continue to limit utilisation levels and rates. Current oil and gas prices remain a burden for the offshore industry. Contracting activity continued to be on a good level in the cruise, ferry and Ro-Ro segments, thanks to higher earnings, ageing fleets, attractive newbuilding prices, and planned regulatory developments. Gas carrier contracting has improved from very weak levels in 2016, thanks to the positive sentiment in the market for floating storage and regasification units (FSRU) and project driven investments.
In terms of compensated gross tonnage, China and South Korea remain the largest shipbuilding nations with 31% and 31% of all confirmed contracts respectively. Japan and Italy accounted for 10% and 5% of the global total.
Marine Solutions’ market shares
Wärtsilä is well positioned in key product and solution areas, such as electrical and automation and gas systems. In the medium-speed main engine market, Wärtsilä’s market share was 43% (40% at the end of the previous period). The market share in auxiliary engines was 13% (8% at the end of the previous period).