Italian gas demand shows signs of slight recovery

Italy's gas demand from industrial users and power plants has shown signs of a slight recovery in recent days after production at some industrial sites restarted.

Deliveries to industrial users yesterday were the highest in over a month. They climbed to 33.9mn m³ from 30.6mn m³/d on working days earlier in April and were last higher on 20 March. Industrial demand had already increased slightly on previous days from earlier in the month (see graph).

Power-sector gas burn also rebounded slightly in recent days. At 56.9mn m³/d on 20 April, it was the strongest for any day since 19 March and while it edged down yesterday, it was still quicker than on almost all days earlier in the month.

Italian gas demand — including from industry and power plants — slid from around mid-March as much more widespread measures aimed at containing the spread of Covid-19 were introduced and economic activity slumped in Italy and globally, in response to the pandemic. The Italian government on 22 March approved a decree halting all non-essential industrial activities until 3 April, which has since been extended multiple times.

Italy's industrial production index in March fell to the lowest in 42 years as a result of the economic downturn, employers' association Confindustria said earlier this month.

While lockdown measures have largely been extended until 3 May, production has resumed at some industrial sites.

This includes steel mills where production restarted last week, which may have bolstered industrial demand, given that the steel and non-ferrous metals sectors accounted for around one-fifth of Italy's aggregate gas consumption in 2018, the latest available data.

Despite some signs of a slight recovery, industrial demand and power-sector gas burn at the start of this week still remained much lower than at the start of last month and compared with previous years. Industrial consumption averaged 38.1mn m³/d in April in the past three years, while power-sector demand was 55.6mn m³/d.

Confindustria said industrial activity could fall by 15pc in the second quarter from earlier in the year, partly depending on when restrictions are lifted and how quickly production can be ramped up again.

By Jacopo Casadei

Italian industrial, power-sector demand edges up mn m³/d