The post-pandemic boom is driving energy consumption and commodity prices and causes a scarcity of energies and raw materials.
German electricity consumption has stabilized at pre-pandemic levels in recent months after a slow start into the year (below the 2017-19 average in January and February)
German gas consumption by RLM customers (power plants and industry) is significantly above pre-pandemic levels. Gas power plants are increasingly replacing power generation from coal and lignite. Gas consumption in the industry has sharply increased in recent months.
The commodity markets are in a price rally – the prices of coal, natural gas, electricity and CO2 emission allowances are all above the price range seen in the last four years. The oil price is still in that range, albeit close to its upper boundary.
Despite the scarcity and high prices of commodities, there is a considerable economic upturn in the manufacturing industries in Germany. The incoming orders index is currently higher than at any point in the last 4 years, and the ifo indices of different branches are above the level at which they were directly before the pandemic hit.
An end to the price rally is currently not in sight. The filling level of German gas storages are currently lower than ever in the last 10 years at this time of year. Gas demand remains high, not just from the industry and power plants, but also to fill up the storages in the summer and for heating purposes in the fall and winter, since the storage filling levels will still be limited at the beginning of the heating season this year.
High commodity prices and the scarcity of raw materials as well as some intermediate goods (such as semiconductor chips) are considered to be risks to the further economic recovery, along with the further progression of the pandemic, especially in countries with limited access to vaccines.
Source: Team Consult
