(Bloomberg) -- Europe’s industries are slashing their usage of natural gas, a sign that factories could be starting to slow production so the vital fuel can be stored for winter.

“There has already been 15-20% gas demand destruction in Europe due to high prices, and countries are preparing to reduce demand further,” said Marco Saalfrank, head of continental Europe merchant trading at Axpo Solutions AG. In the UK alone, industrial gas use has fallen by about 49% through May, which is “staggering,” according to Citigroup Inc. 

It’s a worrying sign for the continent’s economic growth, with countries already struggling to contain increasing inflation rates. Industries from chemicals to steel have warned that they may have to close factories and reduce production due to higher energy costs. Yet that could wind up helping the region store more gas for households for the upcoming winter so they can keep the heat and lights on if the situation with Russian energy exports worsens.

Cold Winter Could Push Europe Toward Gas Supply Shortages

Germany, Europe’s powerhouse, is preparing to trigger the second stage of its emergency gas plan after Moscow cut deliveries through the key Nord Stream pipeline by about 60% last week. The market is nervous about how the Kremlin may react to European leaders meeting later this week in Brussels to discuss Ukraine’s reconstruction plan and bid for membership in the European Union.

“Across heavy industrial users we cover -- chemicals, fertilizers, steel, building materials, paper & packaging -– we get told that prices are being passed onto consumers,” Citi analysts led by Alastair Syme wrote in a note Wednesday. “Yet the demand data is telling us otherwise.” 

High Gas Prices Force UK Fertilizer Plant to Shut for Good

Last year’s energy crunch and record prices also forced heavy industries, including metals and fertilizer makers, to slash gas use, with some producers even shutting facilities. This year, fuel supplies tightened further -- and gas prices gained about 80% -- as Russia squeezed flows to the continent. That coincided with a prolonged outage at a major liquefied natural-gas plant in the US, which the continent was depending on to replace some of Russia’s volumes.

Gas Rationing Gets Closer for Europe as Putin Squeezes Supplies

Land-locked nations in eastern and central Europe are more vulnerable to disruptions in Russian gas flows because they have fewer alternatives than western and southern European nations.

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