In the interim report that was recently published by Wärtsilä the Finnish marine power and propulsion giants gave their views on the market outlook for shipping and shipbuilding markets.
The excerpt from the interim report read as follows:
The outlook for the shipping and shipbuilding markets remains challenging. Overcapacity continues to limit demand for new vessels in the merchant segment, while low oil prices impact investments in offshore exploration and development. In the gas carrier markets, the demand for both LNG and LPG carriers is under pressure due to low oil and gas prices and supply-demand imbalances. The outlook for the cruise and ferry segment remains positive. The demand for cruise vessels is supported by increasing passenger volumes, particularly in Asia, while the contracting of ferries is supported by fleet renewals in Europe, the potential implementation of new emission regulations, and favourable newbuilding prices.
The service market outlook is positive with growth opportunities in selected regions and segments. An increase in the installed base of medium-speed engines and propulsion equipment, as well as the shift to gas based technology, offsets the slower service demand for older installations and the uncertainty regarding short-term demand development in the merchant marine segment.
In the offshore segment, the growth in the installed base during recent years is expected to partially compensate for the challenging outlook in specific regions. The service outlook for gas-fuelled vessels remains favourable. Service demand in the power plant segment continues to be good with an especially positive outlook in the Middle East and Africa. Customers in both the marine and power plant markets continue to show healthy interest in long-term service contracts, as evidenced by the growth in the installed engine base covered by agreements.
The complete interim report can be downloaded from: http://www.wartsilareports.com/en-US/2016/q2/frontpage/
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