Newsletter: 176

Date: April 14, 2025

 

Economic analysis of Europe in the first months of the year:

 The economic analysis of Europe in the first months of the year reveals a nuanced situation, with signs of recovery coexisting with persistent challenges. Here’s a detailed analysis backed up by key figures:

Note: U.S. tariff information has not been taken into account.

 

Economic growth:

• Gradual recovery:
  • The European Commission has revised upwards its growth forecasts for the euro zone, anticipating growth of 0.8% in 2024 and 1.4% in 2025. This adjustment reflects greater resilience than expected at the start of the year.
  • GDP increased by 0.4% MoM in January seasonally adjusted (December: +0.3% MoM), beating market expectations.

 

• Driving factors:
  • Private consumption is strengthening, supported by a robust labor market and a gradual decline in inflation.
  • Exports are also contributing to the recovery, although global uncertainty remains a limiting factor.

 

• Regional disparities:
  • There are significant variations in growth between EU countries. For example, Spain is expected to experience growth of 2.1% in 2024, exceeding the Eurozone average.

Inflation:

• Gradual moderation:
  • Inflation in the Eurozone has shown a downward trend, although it remains above the ECB’s 2% target.
  • The European Commission now estimates that inflation will stand at 2.5% in 2024 and fall to 2.1% in 2025.
• Persistent pressures:
  • Underlying inflationary pressures, such as labor costs and services prices, remain a concern.
  • Geopolitical instability and energy prices may also generate new inflationary pressures.

Labour market:

• Fortress:
  • The European labour market remains robust, with historically low unemployment rates.
  • The unemployment rate in the Eurozone is expected to remain around 6.3% in 2025.
• Challenges:
  • Labour shortages in certain sectors and the need to adapt to digitalisation pose structural challenges.

Risk Factors:

• Geopolitical uncertainty:
  • The war in Ukraine and global geopolitical tensions remain the main source of uncertainty.
• Economic policies:
  • The fiscal and monetary policies of countries and the ECB can have a significant impact on the economy.
• Energy prices:
  • Energy price volatility remains a major risk to economic stability.

 

Key Sources:

• European Central Bank (ECB).
• European Commission.
• FocusEconomics.

 

 

The PET market.

 

• Plastics Production in Europe:
  • According to Plastics Europe:
    • European plastics production in 2023 was 54 Mt, marking a decrease from 58.7 Mt in 2022.
    • Fossil-based plastics in Europe were significantly reduced, from 47.2 Mt in 2022 to 42.9 Mt in 2023.
    • Europe has gone from representing 14% of global polymer production in 2022 to 12.3% in 2023.
  • This indicates a clear trend towards reducing the production of traditional plastics and a possible shift towards more sustainable materials, including rPET.
• PET Market Size:
  • According to Mordor Intelligence:
    • The size of the European polyethylene terephthalate market is estimated at $5.38 billion in 2024.
    • It is expected to reach $7.17 billion by 2029, with a compound annual growth rate (CAGR) of 5.91% over the forecast period (2024-2029).
    • Packaging is the sector with the highest participation within end users.
  • Recycling and Waste:
    • Information from the European Parliament:
      • In 2021, the total plastic waste produced in the EU was 16.13 million tonnes.
      • Approximately 6.56 million tons of plastic waste were recycled.
    • This highlights the growing importance of recycling and waste management in the PET sector.
  • Additional Data:
    • The plastics industry in Europe employs more than 1.5 million people and is made up of more than 52,000 companies, according to Plastics Europe.
    • An estimated 5.5 million tonnes of post-consumer recycled plastic were reintroduced into the EU27+3 economy in 2021, representing a significant increase compared to the previous year.

Important Considerations:

• The transition to the circular economy and EU regulations are transforming the PET market.
• The demand for rPET is on the rise, which influences production and consumption dynamics.
• Fluctuations in raw material and energy prices can affect production costs.

BRENT

 

The Brent oil market is in a reordering phase, with a number of factors converging to define a particular trend towards 2025. Here’s a detailed analysis, backed up by key figures:

 

Demand:

• Moderate growth:
  • Global oil demand is expected to continue its ascent, albeit at a slower pace. Forecasts indicate an increase of approximately 1.1 million barrels per day (b/d) in 2025.
  • This growth is influenced by the moderation in the growth of the main consuming economies:
    • United States: Growth is forecast at 2.0% (compared to 2.7% in 2024).
    • China: Growth is estimated at 4.1% (up from 4.8% in 2024).
    • Eurozone: growth of 1.0% is anticipated (from 0.8% in 2024).
• Energy transition:
  • The adoption of electric vehicles and increasing investment in renewables are starting to impact demand in the long term, although their effect in 2025 will be relatively limited.

Offer:

• Non-OPEC+ production increase:
  • A significant increase in non-OPEC+ production is forecast, with an estimated increase of 1.4 million b/d in 2025.
  • The United States is leading this growth, although shale production could be affected by lower prices.
  • Production from Latin American countries, such as Brazil, and Guyana is increasing, causing greater supply.
• OPEC+ decisions:
  • OPEC+ has implemented production cuts to support prices, and its strategy in 2025 will be crucial.
  • The organization is planning to increase its production gradually, but this measure is subject to change depending on market conditions.

Prices:

• Downward trend:
  • A downtrend in Brent prices is anticipated, with an expected average of around $73 per barrel in 2025.
  • This decline is due to the increase in supply and the moderation in demand growth.
• Volatility:
  • Geopolitical events, such as tensions in the Middle East, and OPEC+ decisions could lead to significant fluctuations in prices.
  • Analysts at Goldman Sachs forecast that Brent crude will average $76.00 per barrel. J.P. Morgan takes a more bearish stance, projecting Brent at $73.00 per barrel.

 

Key factors:

• Global economic growth: The evolution of the world economy, especially in China and the United States, will be decisive for demand.
• OPEC+ decisions: OPEC+ production policies will have a significant impact on supply and prices.
• Non-OPEC+ production: Increased production in countries such as the United States and Brazil will partly balance OPEC+ cuts.
• Energy transition: In the long term, the transition to cleaner energy will influence oil demand.
• Geopolitics: Geopolitical conflicts and tensions cause great instability in prices.

 

Sources of information:

• BBVA Research
• International Energy Agency (IEA)
• Goldman Sachs.
• J.P. Morgan.

 

It is essential to consider that these forecasts are subject to change, and the evolution of the oil market may be altered by various unforeseen factors.

 

 

 

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