For the Quarter Ending March 2025
North America
In the first quarter of 2025, the Gear Oil market in North America maintained a relatively stable price trend, although fluctuations occurred due to ongoing supply and demand challenges. At the start of the quarter, supply was generally adequate, supported by higher exports from U.S. producers. However, certain Gear Oil grades tightened as production cuts were implemented to prevent oversupply.
These tight conditions were further amplified by planned plant maintenance and unforeseen disruptions at key facilities, which led to supply constraints by mid-quarter. Demand for Gear Oil also increased moderately, particularly in the lubricants sector, as manufacturers prepared for the upcoming spring production season.
As Q1 concluded, additional supply challenges emerged when two major producers declared force majeure due to severe weather, coupled with a refinery going offline for scheduled maintenance. These disruptions further constrained Gear Oil availability. Despite these hurdles, demand remained robust, fueled by a recovery in the automotive sector, with rising vehicle sales, particularly in light trucks and electric vehicles (EVs). The construction sector also continued to drive steady demand, especially for heavy machinery used in infrastructure projects, although it faced challenges related to rising input costs and labor shortages.
APAC
During the first quarter of 2025, the Gear Oil market in the APAC region exhibited a generally stable price trend, with moderate fluctuations influenced by supply and demand dynamics. The quarter began with a bullish movement, driven by tight feedstock availability and production disruptions due to plant shutdowns in Singapore, notably at Royal Dutch Shell. These factors raised production costs, although demand from the automotive sector remained robust, especially with significant growth in new car sales in Singapore and India. The demand for Gear Oil was supported by the rise of electric vehicles (EVs), particularly in China, where the growth of new energy vehicles spurred increased lubrication requirements. By the mid-quarter, Gear Oil prices stabilized as feedstock availability improved slightly, but geopolitical tensions and disruptions in the crude oil supply chain continued to affect production costs. Southeast Asia's construction sector also contributed to steady demand, with increased infrastructure projects driving the need for Gear Oil in heavy machinery. Towards the end of Q1, supply chain challenges, including port congestion and fluctuating freight rates, put pressure on logistics, slowing export growth. Despite these disruptions, the automotive and construction sectors in key markets like India and Singapore helped sustain demand. The quarter concluded with stable prices, though the market faced headwinds from rising production costs and logistical delays.
Europe
In the first quarter of 2025, the Gear Oil market in Europe experienced a declining price trend, mirroring the overall softness in the base oil market. Prices were under pressure due to weak demand and high crude oil prices. The quarter began with subdued market activity, mainly due to low demand from the automotive and lubricant sectors, which were affected by the year-end holiday season and ongoing economic uncertainty across Europe. By mid-quarter, the availability of Group I base oils further contributed to the downward trend in Gear Oil prices. The underperformance of the automotive sector, with falling vehicle sales and concerns over potential tariff increases, kept demand for Gear Oil muted. Additionally, the lubricant sector remained sluggish, as manufacturers hesitated to place large orders amid uncertain market conditions. As the quarter ended, while base oil prices stabilized, the Gear Oil market in Europe remained cautious. Buyers opted for smaller, more measured purchases, awaiting clearer signals from the market. Supply was adequate to meet demand, although disruptions were expected in April due to scheduled refinery maintenance. Demand from the automotive and construction sectors played a significant role in shaping the market. Despite challenges such as slower vehicle sales and a contracting construction sector, Gear Oil consumption remained steady, driven by ongoing requirements in both heavy machinery and vehicle maintenance. However, the overall market outlook stayed cautious, influenced by broader economic and geopolitical pressures.
For the Quarter Ending December 2024
North America
The North America Gear Oil market witnessed a period of price stability during the fourth quarter of 2024, a marked contrast to the preceding quarter. While minor price fluctuations were observed throughout the period, the overall market dynamics remained relatively balanced.
In October, a slight surge in Gear Oil prices was observed, primarily attributed to a rise in upstream Crude Oil prices, which consequently increased manufacturing costs. Concurrently, a surge in demand from the automotive sector led to an uptick in inquiries for Gear Oil. This demand surge was further evidenced by a Preliminary figure, including estimates for sales by major automakers like GM, Stellantis, Tesla, and others, indicate that the downstream automotive sector experienced robust growth in October. A total of 1,327,307 units were sold, representing a substantial 12.8% increase compared to the previous month.
However, this upward trend proved to be short-lived. By December, demand from the downstream lubricants sector had noticeably weakened, dampening consumer sentiment. Furthermore, a consistent unchanged prices of base oil feedstocks contributed to a stable manufacturing cost.
APAC
The fourth quarter of 2024 for Gear Oil in the APAC region has been characterized by stable prices as compared to the third quarter. While minor fluctuations were observed throughout the fourth quarter of 2024, the overall market dynamics remained under balance. In October 2024, the prices of Gear oil have marginally surged due to the increase in the upstream Crude oil prices which escalated the manufacturing costs during this timeframe. Moreover, the demand for Gear oil from the downstream automotive has surged which slightly increased the inquiries. According to the Federation of Automobile Dealers Associations, October witnessed a significant surge in unit sales, reaching 4,083,159 units. This represents a substantial 75.3% increase compared to the preceding month. However, this trend has not continued till December, as the demand for Gear oil from the downstream lubricants sector has declined which further resulted in bearish consumer sentiments. Moreover, the continuous decline in the feedstock base oil prices in November has declined the manufacturing costs.
Europe
The European Gear Oil market exhibited a declining during the fourth quarter of 2024 compared to the preceding quarter. While minor price fluctuations were evident throughout this period, as in October 2024, a marginal increase in Gear Oil prices was observed, primarily attributable to a surge in upstream Crude Oil prices. This increase in Crude Oil prices consequently escalated manufacturing costs for Gear Oil producers. Concurrently, a surge in demand from the downstream automotive sector was evident, resulting in a slight increase in inquiries for Gear Oil products. However, this upward trend proved to be short-lived. By November, a discernible decline in demand from the downstream lubricants sector became evident, leading to a dampening of consumer sentiment within the Gear Oil market. New passenger car registrations in Germany experienced a decline in December 2024, according to data released by the KBA. A total of 224,721 new vehicles were registered, marking an 8.1% decrease compared to the previous month. Furthermore, a consistent decline in the prices of base oil feedstocks throughout November played a significant role in reducing manufacturing costs for Gear Oil producers.
For the Quarter Ending September 2024
North America
Throughout Q3 2024, the North American Gear Oil market exhibited stability, with prices remaining relatively unchanged. Though prices remained stable initially, Gear Oil demand saw an uptick in July, prompting suppliers to tap into their backup reserves. A key driver of stability was the balanced-to-tight supply conditions across most stock categories as production levels were keeping pace with the current demand which prevented any major price spikes during this timeframe.
Moreover, inventory building in anticipation of hurricane season and unexpected production outages contributed to a tight supply situation for Gear Oil in July. However, after witnessing immense stability, the US Gear oil market witnessed a marginal decline in price during September 2024, primarily driven by lower demand from the downstream lubricants market. This price reduction was initiated by Motiva, followed by similar moves from other suppliers like Excel Paralubes, SK Enmove, Chevron, and Calumet, which negatively impacted the prices.
The overall trend in the third quarter remained stable, reflecting a resilient market amidst various challenges underscoring the prevailing stability.
APAC
In Q3 2024, the Gear Oil price trend in the APAC region has been characterized by a fluctuating pricing environment with a decrease in prices. Various factors influenced this stability, including moderate supply levels, low to moderate demand, and steady production rates and demand. Additionally, logistical challenges such as port congestion made imported Gear Oil, less appealing, further contributing to the decline in prices. Additionally, local Gear oils were more affordable than imports, allowing domestic consumers to meet many of their needs. This resulted in a cautious stance from purchasers, which in turn reduced demand for additional Gear oil cargoes. However, in the mid-quarter, concerns about potential recessions impacting the international crude oil market and refinery operations contributed to the pricing environment. Additionally, fluctuations in the availability of base oil supplies and geopolitical tensions influenced market dynamics. Singapore, experiencing the most significant price changes, saw fluctuations due to factors like increased feedstock prices and seasonal fluctuations. Q3 recorded a price decrease from the previous quarter, maintaining an overall stable trend. The market remained stable throughout, with no significant disruptions reported. Overall, the pricing environment in the APAC Region for Gear Oil in Q3 2024 reflected a stable sentiment, with prices showing resilience amidst various market influences.
Europe
The third quarter of 2024 in the European Gear Oil market has been characterized by stability in prices. While Gear Oil prices in Europe including the Netherlands remained stable during July 2024, the overall market remained surprisingly high for this time of year due to ongoing supply constraints. High shipping costs resulting from the Hamburg port strike and the Red Sea issues, particularly for exports to Europe face a significant lack of Gear Oil. The European Gear Oil market in the Netherlands has entered a period of relative calm, with prices holding steady amid a backdrop of seasonal slowdown and improving supply conditions. The traditional summer lull has seen a decline in market activity as industry participants take advantage of the holiday period to recharge. While the conflicts have disrupted supply chains and forced some businesses to adapt their operations, the market has shown resilience in September. The quarter has seen a balanced supply-demand dynamic, with restored supplies and lower upstream Crude oil costs and feedstock Base Oil prices during September contributing to the overall stability.
For the Quarter Ending June 2024
North America
In Q2 2024, Gear Oil pricing in North America exhibited a strong upward trend throughout the quarter. The primary driver of this increase was the consistent rise in upstream Crude Oil prices, which affected the cost of Base Oil, a key feedstock for Gear Oil. Additionally, geopolitical tensions and resulting supply chain disruptions further raised production costs. Refiners prioritized Base Oil production in response to competitive pressures from other fuels, reducing the feedstock availability for Gear Oil production.
In the beginning of the quarter, refiners such as Safety Kleen and Avista Oil announced new markups in the paraffinic market. Meanwhile, Ergon, Process Oil, and San Joaquin Refining implemented price hikes in the naphthenic market. Major players like ExxonMobil, HollyFrontier, Calumet, and Motiva also raised prices to maintain profit margins, contributing to a bullish market trend.
Seasonal factors also played a crucial role, with market participants increasing procurement and stockpiling activities ahead of the hurricane season to mitigate potential supply chain delays. This proactive approach reflected strong anticipated demand for the upcoming quarter and further reinforced the upward price movement.
APAC
In Q2 2024, the gear oil market in the APAC region experienced a significant price increase driven by several key factors. Strong demand from the machinery, automotive, and aftermarket sectors was the primary driver of this trend. Increased consumption was further exacerbated by supply constraints and dwindling inventories. Additionally, rising base oil prices contributed to the overall surge. Market participants engaged in proactive stockpiling to address potential supply chain disruptions and logistical challenges, widening the demand-supply gap. Despite these conditions, there were no major plant shutdowns or severe disruptions that worsened the situation. Singapore saw the most notable price changes in the region. The gear oil market there demonstrated a strong upward trend, driven by seasonal demand and strategic inventory buildup in anticipation of the monsoon season. This proactive approach led to significant price increases as the market anticipated potential supply chain challenges. Prices continued to rise throughout the quarter, with a steady increase observed between the first and second halves of the period. This sustained upward movement reflects a positive market outlook driven by robust demand and strategic market behaviors.
Europe
In Q2 2024, Gear Oil prices in Europe experienced a significant shift from a bearish to a bullish trend. While the overall price trajectory was upward, several stabilizing factors were noted, including increased imports and enhanced local production. At the beginning of the quarter, production was subdued due to the Easter holidays, and many businesses also closed for the Ramadan festival. It resulted in a substantial drop in trading activity and sustained bearish market sentiment. By mid-quarter, however, prices in Germany began to rise, driven by increased operating costs and supply shortages. Seasonal factors, such as the summer driving season, further elevated demand for lubricants, contributing to higher prices by the quarter's end. Compared to the previous quarter, prices initially declined but increased during the latter half of Q2. This rise was driven by higher feedstock costs and disruptions in production and supply chains. Additionally, rising logistics costs and seasonal demand spikes further contributed to the price increase despite some stabilizing factors.
