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The marine propeller market in Asia Pacific is expected to witness the highest market size during the forecast period

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The marine propeller market in Asia Pacific is expected to witness the highest market size during the forecast period

March 05
17:43 2020

The marine propeller market in Asia Pacific is projected to be highest in market size during the forecast period. The Asia pacific shipbuilding industry is involved in the construction of complex naval vessels, such as cruise ships, ferries, mega yachts, submarines, and dredgers (offshore vessels). Moreover, the marine equipment industry in Asia Pacific offers a wide range of products that include propulsion systems, diesel engines, environmental safety systems, cargo handling systems, and related electronics. The demand for marine propellers in the defense sector, especially the navy, is projected to increase, owing to the ongoing territorial conflicts among countries, such as China, the Philippines, North Korea, Japan, India, Vietnam, Pakistan, and Afghanistan.

The market in Europe is projected to grow at the fastest rate during the forecast period. The rise in seaborne trade has subsequently led to an increase in demand for ships that are used to transport manufactured goods to various regions worldwide. Thus, the rise in the number of ships has contributed to the growing demand for propulsion systems and propellers in this region.

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Market Dynamics : Marine Propeller Market

Driver: Growth in international seaborne trade

Maritime transport is considered the backbone of international trade. According to data published by the International Chamber of Shipping (UK), approximately 90% of the global volume of merchandise trade is being carried by sea as transport of goods and raw material through this channel is much cheaper than rail and road transport.

Countries in the Asia Pacific region have become leading providers of manufactured goods. The demand for container ships is significantly high in this region, owing to an increase in the export of goods. Most shipbuilding companies, including manufacturers of propulsion systems and propellers, are located in the Asia Pacific region. Thus, the demand for maritime transport services and the growth of the shipping industry in Asia Pacific have contributed to the increased demand for marine propellers in this region.

Restraint: Stringent environmental regulations worldwide

Numerous environmental regulations, policies, and subsidy schemes vary country-wise based on the intensity of emission caused by harmful gases, such as SOx, NOx, and CO2. For instance, MARPOL Annex VI guidelines released by the International Maritime Organization (UK) defined the limits for NOx emissions and mandated the use of fuels with low sulfur content in 2005. These guidelines are applicable to vessels and ships trading in US waters as well as within 200 nautical miles of the coast of North America, which is also known as the North American Emission Control Area (ECA). Manufacturers of ship components are focused on the development of marine propulsion systems that comply with various environmental regulations formulated by governments of countries worldwide.

Opportunity: Technological innovations in marine propulsion systems

Over the past decade, innovation in marine technology has resulted in the advent of highly advanced and energy-efficient marine propulsion systems that offer maximum output with minimum fuel consumption. Presently, shipping operations across the globe consume approximately 200 million tons of diesel and oil annually. Merchant vessels used for shipping operations emit the same percentage of sulfur oxide as compared to other transport vehicles, such as cars, trucks, and buses. The innovation of hybrid power marine engines and propulsion systems has resolved the issue associated with high fuel consumption and subsequently emissions. Reduction in fuel consumption will reduce the cost associated with seaborne trade which will further increase the seaborne trade and demand for new merchant ships.

Challenge: Shipping overcapacity

Shipping overcapacity refers to the oversupply of shipping vessels against their demand. The anticipation of continued expansion in trading activities, for which new vessels are ordered to cater to the expected demand, is one of the major factors that has led to shipping overcapacity. New energy-efficient vessels are being developed to replace old vessels. However, a few of the old vessels have not been scrapped, owing to their low scrapping value. These vessels are sold in the market, thereby adding more tonnage to the already oversupplied market. The overcapacity in the shipping industry has led to a decline in the number of new orders of vessels, despite growth in the international seaborne trade. Thus, reduction in new shipbuilding orders is anticipated to act as a key challenge to the growth of the marine propeller market.

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