BAKU, Azerbaijan, January 31. Industrial gas and power demand are expected to witness a slow recovery starting in the second half of 2024 and extending into 2025, according to a recent report by ICIS, a leading provider of Independent Commodity Intelligence Services, Trend reports.
The resurgence in demand comes after a period of significant strain on the industry, with soaring energy costs and rising interest rates impacting investment-sensitive sectors over the past two years. Data from Oxford Economics indicates that manufacturing output in the Eurozone contracted by 0.2 percent in 2023, with value-added consumer goods experiencing a more pronounced decline of 2.4 percent.
The chemicals sector, a major consumer of industrial gases, faces structural challenges, while energy-intensive industries like steel have also witnessed notable declines. Eurofer's Q4 2023 report forecasts a 5.2 percent reduction in European steel consumption for the year.
Despite these challenges, there are some positive indicators for the industry in 2024. Inflation levels are expected to decrease, followed by a potential decline in interest rates. Additionally, recent assessments from Oxford Economics suggest that sentiment among industrial businesses and factory surveys are beginning to stabilize.
"We anticipate a gradual recovery in residential gas and power demand as household purchasing power improves throughout 2024 and into 2025," noted ICIS. However, the report cautioned that a strong rebound in demand levels is unlikely, given that wholesale prices remain close to double pre-crisis levels.
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