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Lower scrubber demand hits new order volume for Wartsila

Wartsila’s new orders for the marine segment of its business fell by 30% in the third quarter of 2019 as demand for scrubbers waned compared to the previous year.

Wartsila’s third quarter marine order intake was EUR705m compared to EUR1.01bn in the same period in 2018, with marine equipment orders plunging 55% to EUR260m in Q3 2019 while service orders increased 5% to EUR554m.

The company noted that scrubber orders were down from last year’s “exceptionally high levels” when orders for exhaust gas cleaning systems surged to enable installation ahead of the 1 January 2020 deadline for the IMO 2020 regulation.

“Uncertainty concerning bunker fuel pricing and availability has delayed decision-making among customers for scrubber technology investments, despite supportive initial price indications,” Wartsila commented.

The overall marine orderbook was up 10% at EUR3.89bn compared to EUR3.45bn.

The company is seeing more interest in environmental fuelling solutions to reduce emissions. “Sustainability issues and regulations are pushing increased efforts to minimise the environmental footprint of the shipping industry. This is resulting in a growing interest in LNG as a fuel and in hybrid battery packs across all vessel segments.”

The outlook for Wartsila’s marine business remained soft.