Green signals are visible regarding energy demand in the industrial sector in Europe. but i also Liquefied Natural Gas (LNG), that is, the one that comes by ship, once the Russian gas pipeline was practically shut down after the invasion of Ukraine. It is expected that demand for LNG will increase 8% per annum.
The main conclusion of ICIS Energy Outlook to 2024 However, the revival will be slow and the benefits to the largest industrial chemical consuming subsector will be very limited.
In the residential sector, macroeconomic factors will be at least as important to consumer behavior patterns as the direct costs of gas and electricity.
(Wave of liquefied natural gas megaprojects around the world, while aim is to triple renewable energy)
“We estimate that household purchasing power will increase during 2024 and into 2025 Gradual improvement in residential gas and energy demand, “However, with wholesale prices remaining close to double pre-crisis levels, it is unlikely that demand levels will see a strong recovery,” the report said.
Therefore, ICIS not only forecasts 8% year-on-year growth in European gas demand 2.9% increase in energy demand in 2024, In both cases, consumption is expected to remain below 2022 levels.
The TTF gas price for 2024, the Dutch reference index in Europe, was at 33,575 euros/MWh, lost 57% of its value throughout 2023. Most of the losses were seen in the first half of the year. Weakness reflects growing confidence gas supply margin Europe is in the process of emerging from its second consecutive (and warmer than normal) winter and below-average demand.
Gas prices remain the main driver of energy prices in European markets: German Cal-24 (one-year futures prices) lost 60% of its value during 2023. Looking ahead, the main short-term bullish risks will be associated with LNG market tightness
There will be 85% LNG in 2024
On the supply side, growth is expected LNG to meet 85% of increased gas demand in 2024 and ability to Regasification of Western Europe The West will expand by 9%. It is expected that gas storage 55% will be reached by 1 April and the EU’s 90% target is likely to be reached by the winter of 2024/2025.
Forecasts indicate that the global LNG market will not be able to cover the increase in demand 5% Because supply will only experience an increase 2%, If additional supply concerns emerge, it could send European gas prices higher.
Gas demand in Europe 12 more GB ICIS
Western Europe’s LNG imports are expected to amount to 1,743 TWh in 2024, 15% more than in 2023.
Regasification capacity to be expanded in Western Europe 226 TWh/year in 2024 An increase of 9% year-on-year. Germany will dominate with 154 TWh/year this belgium Thief 72 TWh/year, Germany plans to commission a new floating LNG regasification terminal, stade and expand regasification capacity in existing terminals e.g. lubmin -Later Mukran, bransbüttel this Wilhelmshaven, In Belgium, the first expansion of an LNG terminal in Belgium came into operation on 1 January. zeebrugge,
More renewable and less fossil
Regarding energy, An additional 118 TWh of renewable and nuclear generation is projected to offset a 75 TWh increase in demand. meaning that Fossil production will experience another year of decline,
Tends to closely follow the energy flow Germany Where the country is projected to move from Europe’s second largest net exporter in 2022 to its second largest net importer in 2024 as a result of the energy phase-out. Nuclear, Coal and Lignite,
The industry has been hit hard by a steep rise in energy costs over the past two years and rising interest rates, which has hit investment-sensitive sectors. data from oxford economics The suggestion is that value-added output for the manufacturing sector in the Eurozone falls by 0.2% in 2023, leading to an even larger decline of 2.4% in value-added consumer goods.
He chemical sector is undergoing significant structural challenges, while other energy-intensive industrial sectors, e.g. steel has also recorded a significant decline. European Steel Association (Eurofer) The fourth quarter 2023 report said it is estimated 5.2% decrease in European steel consumption for the entire year.
Demand growth in petrochemical sector ICIS
Some more positive factors for the industry in 2024 are inflation levels expected to decline, which should be followed Falling interest rates. Oxford Economics recently noted that “the industrial business sentiment survey and factory survey are beginning to show signs of bottoming out.”
ICIS creates a special section for the chemical sector. He has pointed out this in his report Chemistry is the largest subsector of industrial energy demand in Europe Which represents 22% of the total in 2021. It is therefore interesting to focus on this region as a case study of industrial demand problems in Europe.
The sector has been particularly affected over the past 18 months by a combination of persistently low demand A increasing global competition and cost pressures driven by higher energy prices. This led to unsustainable margins in the long term and the closure of many petrochemical plants.
“In 2024, we expect to see greater efforts across Europe to rationalize production as well as maintain low plant operating rates,” he said in the report. The decline in inflation rates may have some positive impact on chemical demand markets in the second half of the year by driving higher consumption, “but we do not expect much benefit to demand,” he concluded.