The Poly Alpha Olefin (PAO) market saw a period of price stability in the first week of May in several important global regions, including the North American (USA), European, and Asia-Pacific (APAC) markets. Due to balanced dynamics in the lubricant and automotive industries, PAO prices stayed relatively stable even though upstream ethylene prices declined.  In the first week of May, nations in APAC, including China and India, saw a flat trend in PAO prices. This happened despite a slight decline in ethylene prices due to oversupply and a lack of downstream polyethylene uptake. However, because of suppliers' controlled inventory levels and cautious downstream demand for automotive lubricants, the decrease in raw material costs was insufficient to affect PAO prices.

The demand for high-performance lubricants has remained steady despite the region's automotive sales showing mixed results, with China and India experiencing modest growth. Manufacturers were encouraged to maintain current levels by the steady offtake from OEMs and aftermarkets, which helped to mitigate any price volatility.  Despite declining ethylene values, PAO prices in Europe showed comparable resilience. High inflation and interest rates that impact car sales are putting pressure on the automotive industry in major markets like Germany and France. Nonetheless, the lubricants sector continued to be helpful, especially in the commercial and industrial vehicle markets. The region's market players chose to hold prices steady while keeping an eye on macroeconomic indicators. In their procurement cycles, buyers continued to be cautious but consistent, concentrating on necessary restocking rather than large orders.

During the first week of May, there were no notable changes in PAO prices in the US. Even though dealership inventory is constantly changing, the automotive industry still has a consistent need for lubricants, particularly synthetic oils and gearbox fluids. In the meantime, a decline in upstream ethylene prices brought on by adequate cracker runs and low derivative demand did not result in price reductions for PAOs. A wait-and-watch strategy was mentioned by manufacturers and distributors, who prioritised operational effectiveness and margins over aggressive pricing strategies.

ChemAnalyst predicts that the PAO market will remain stable for the foreseeable future, despite the global softening of upstream ethylene prices. Careful inventory control throughout supply chains and consistent demand from the automotive lubricants industry are supporting this resilience. But now, market players are focussing on impending changes in consumer vehicle demand and automotive production, which may have an impact on pricing dynamics. PAO producers may have the chance to lower prices or provide attractive offers in order to land longer-term contracts if auto sales start to rebound and upstream costs remain low.