Throughout the second half of May 2025, the price trend of the global poly alpha olefin (PAO) market remained steady in important markets such as China and the United States but mixed in Europe. Resilient downstream demand, especially from the automotive lubricants industry, and stable upstream raw material costs supported this consistency. India, however, distinguished itself with a minor price surge in the fourth week of May, suggesting regional variations in demand.

Because of a stable upstream ethylene market and little volatility in feedstock prices, PAO prices have remained stable in major economies. The supply and demand for ethylene, a key component in the creation of synthetic base oils like PAO, stayed balanced, limiting production costs. As a result, producers were able to keep prices constant throughout Europe, East Asia, and North America.  The automotive sector, a significant user of lubricants based on PAO, maintained consistent performance on the downstream side. Increased production in the passenger and commercial vehicle segments helped to maintain stable automotive sales in the USA and Europe. As a result, the demand for industrial lubricants and high-performance engine oils remained steady, further stabilizing PAO prices.

On the other hand, the price of PAO in India slightly increased during the third week of May. The main reason for this was the rise in automobile sales brought on by election-season seasonality and economic caution. Customers making selective purchases, which stabilised the production of automobiles and, consequently, the use of lubricants. As a result, there was moderate demand for high-performance base oils like PAO, which reflected both OEMs and the aftermarket sector. With distributors and blenders reducing offtake volumes, sellers responded by modestly adjusting prices upward to manage margins amid lower transaction volumes. While this price adjustment appears counterintuitive to the demand trend, it reflects sellers’ efforts to balance inventory and maintain pricing discipline in a slower-moving market.

Industry participants are now focussing on June after the global PAO market ended the second half of May stable to decline in China, Germany, the UK, and the USA, according to ChemAnalyst. Prices are anticipated to remain stable due to stable upstream ethylene prices and steady demand from the automotive lubricants industry. However, concerns regarding the recovery of regional demand are raised by India's modest decline in PAO prices during the third week. Market observers predict that seasonal and political factors may cause the decline to be short-lived. In order to determine momentum, all eyes will be on the performance of the Indian lubricant and automotive industries in early June.