For the Quarter Ending June 2025
North America
• The Polyalphaolefin (PAO) Price in the USA decreased by 4% quarter-over-quarter in Q2 2025, driving a downward trend in the Price Index.
• The PAO Production Cost Trend remained mostly steady despite fluctuations in feedstock ethylene costs, while supply availability was adequate amid consistent manufacturing operations and uninterrupted logistics.
• Subdued offtake from downstream segments such as automotive and industrial lubricants kept demand muted, even though vehicle servicing needs maintained a baseline level of consumption.
• The PAO Demand Outlook remained cautious, with buyers preferring to rely on existing inventories rather than bulk procurement due to uncertainty around broader economic conditions and high freight costs.
Why did the price of PAO change in July 2025 in North America?
• In July 2025, the PAO Spot Price in North America declined due to sluggish demand from downstream automotive and lubricant sectors, despite stable supply and feedstock availability.
• The PAO Production Cost Trend showed limited upward pressure, with only mild increases in ethylene prices, which weren’t sufficient to offset the demand-side weakness.
• The PAO Demand Outlook remained soft, as vehicle sales dipped significantly, dampening consumption in the automotive lubricants segment.
• The PAO Price Forecast suggests continued bearish sentiment in the near term unless a sustained recovery in automotive and industrial demand materializes.
APAC
• The PAO Spot Price in China remained unchanged quarter-over-quarter in Q2 2025, maintaining a flat trajectory in the Price Index.
• Demand from the downstream automotive and industrial lubricants sectors held steady, with growth in new energy vehicle (NEV) output and traditional ICE vehicle usage supporting overall consumption.
• The PAO Production Cost Trend remained stable, with consistent ethylene feedstock pricing and minimal disruption across domestic production and logistics channels.
• Adequate supply levels, sustained import flows, and cautious procurement strategies among blenders contributed to the market's price stability despite global cost pressures.
Why did the price of PAO change in July 2025 in Asia?
• In July 2025, the PAO Spot Price in China remained stable, supported by balanced supply conditions and steady demand from lubricant and automotive segments.
• The PAO Production Cost Trend stayed neutral due to consistent ethylene feedstock prices and stable manufacturing activity.
• The PAO Demand Outlook was moderately positive, driven by robust NEV production and sustained ICE vehicle usage, although cautious inventory management restrained immediate spot market activity.
• The PAO Price Forecast anticipates continued price stability in the near term, provided feedstock trends and downstream consumption remain steady without external shocks.
Europe
• The PAO Spot Price in Europe decreased by 2% quarter-over-quarter in Q2 2025, reflected in a softer Price Index, largely due to elevated inventory levels and subdued automotive lubricant demand.
• The PAO Production Cost Trend remained mostly steady, as fluctuating feedstock ethylene prices were offset by stable energy inputs and optimized manufacturing operations.
• The PAO Demand Outlook stayed muted, with lower consumption from lubricant blenders and restrained activity in the automotive and industrial sectors across Germany and neighboring markets.
• Despite stable supply and smooth logistics, sellers faced mounting competitive pressure and resorted to cautious discounting to sustain market participation.
Why did the price of PAO change in July 2025 in Europe?
• In July 2025, the PAO Spot Price declined due to oversupply conditions and soft downstream demand from lubricant and automotive sectors.
• The PAO Production Cost Trend was stable, aided by balanced raw material prices and unhampered manufacturing throughput.
• The PAO Demand Outlook remained cautious, with lubricant consumption impacted by modest vehicle production and weaker industrial activity.
• The PAO Price Forecast suggests continued mild downward pressure unless there is a notable rebound in automotive lubricant blending and export momentum.
For the Quarter Ending March 2025
North America
In Q1 2025, PAO prices in the U.S. rose moderately by 2.77%, driven by tightening supply conditions and modest growth in manufacturing activity. Weather-related disruptions at key East Coast ports in January caused slight delays in transportation and delivery, leading to constrained supply in some regions and supporting the price uptick.
Additionally, the U.S. manufacturing index posted a 2.85% increase from the previous month, with accelerated output and new orders. This improvement, coupled with the clearance of outstanding work, created upward pressure on lubricant demand. Though base oil and feedstock ethylene prices remained relatively stable or slightly down, localized supply issues and growing industrial activity contributed to the price increase.
While downstream demand remained steady overall, EV sales showed an upward trend, offering some support to lubricant usage despite a general slowdown in traditional automotive sales. With producers exercising caution amid supply chain inconsistencies, the slight price increase reflects a delicate balance between supply constraints and selective demand recovery.
APAC
In the first quarter of 2025, the PAO market in the APAC region has experienced a slight price decline of 0.26%, primarily due to weakening demand across key sectors. The most notable factor contributing to this decrease was the reduced consumption from the automotive industry, with China’s passenger vehicle retail sales falling by 12.1% year-on-year in January. This drop significantly affected lubricant demand, a key downstream application of PAO.
Additionally, many manufacturers shifted to using existing inventories rather than placing new orders, reflecting a cautious procurement strategy amid subdued market sentiment. The post-holiday slowdown in manufacturing activity further decreased demand for industrial lubricants.
The ongoing shift toward EV-specific lubricants also impacted traditional PAO consumption patterns, while the absence of new market entrants limited additional demand. Despite stable raw material availability and lower shipping costs due to declining freight indices, demand-side weakness outweighed supply stability, resulting in a slight overall price reduction in the PAO market across the region.
EUROPE
In the first quarter of 2025, the European PAO market witnessed a significant price decline of 14.87%, driven primarily by oversupply and weak demand across downstream sectors. As production outpaced consumption, many manufacturers were compelled to lower prices to clear surplus inventories. Several PAO plants in the region reduced their operating rates or temporarily halted production to manage excess stock levels.
Germany, a key PAO market, saw continued weakness in the manufacturing sector, with reduced output, declining new orders, and shrinking export volumes contributing to diminished demand. Automotive sales and car production, especially in the internal combustion engine segment, also remained below previous levels. This downturn in the automotive industry, traditionally a major consumer of PAO, further pressured market demand.
Additionally, many businesses adopted conservative procurement strategies, relying on existing inventory rather than placing new orders. While the EV sector grows, its preference for alternative lubricants has reduced reliance on traditional PAOs, reinforcing the downward price trend in the region.
For the Quarter Ending December 2024
North America
In the fourth quarter of 2024, the PAO market in North America displayed a relatively stable pattern, albeit under the influence of weak demand and slower movement in key sectors, particularly lubricants. The lubricant industry, which is a primary consumer of PAOs, saw reduced growth during this period due to slower-than-expected recovery in industrial operations and restrained consumer spending.
Additionally, limited export activities contributed to the overall stability in the North American PAO market. Geopolitical and economic uncertainties, coupled with shifting trade dynamics, led to a reduction in export opportunities, especially to emerging markets. These factors restrained the volume of PAO exports, further limiting market growth potential.
Despite these challenges, the PAO market remained stable, supported by consistent domestic demand and strategic adjustments by industry players. Manufacturers focused on maintaining production levels and optimizing supply chains to adapt to the slower pace of the market. As per ChemAnalyst, the cost of PAO 8Cst was settled at USD 2920/MT on a FOB Oklahoma basis.
APAC
In the fourth quarter of 2024, the performance of the PAO market in Asia experienced a notable decline. This trend was primarily driven by weak demand and sluggish movement in key sectors such as lubricants, which constitute a significant portion of PAO consumption. The lubricant industry, which typically drives the demand for PAOs due to their role in enhancing product performance, faced slow growth during this period. Factors such as lower industrial activity and a shift in consumer preferences toward more cost-effective alternatives contributed to the subdued market conditions. In addition, limited export activities further exacerbated the decline in demand. Geopolitical uncertainties, supply chain disruptions, and fluctuating oil prices had a dampening effect on trade flows across the region. The reduced export opportunities, especially to markets in Europe and North America, stifled the overall growth of the PAO sector in Asia during Q4. As a result, manufacturers faced challenges in maintaining production levels and optimizing inventory management. With demand remaining sluggish, the market outlook for PAOs in the short term remains cautious. Industry players are likely to adopt more conservative strategies, focusing on cost management and improving operational efficiencies to navigate the current market dynamics.
Europe
In the fourth quarter of 2024, the European PAO market saw a slight improvement in prices at the beginning of the period, driven by restocking efforts and a modest uptick in demand from the lubricant sector. As manufacturers replenished inventory levels and adjusted to changing market conditions, prices experienced a brief rise. However, as the quarter progressed, PAO prices stabilized, and the demand for the product remained steady, with supply levels proving sufficient to meet market needs. Despite the stable demand for PAO, the market faced challenges, particularly in the downstream automotive sector. The performance of the automotive industry remained bearish throughout Q4, as sluggish consumer demand and reduced vehicle production dampened the need for traditional lubricants. Additionally, the increasing shift toward electric vehicles (EVs), which require fewer lubricants, placed further pressure on PAO consumption within this sector. Overall, the European PAO market maintained a stable pattern during the quarter, with weak demand and slow movement in lubricant sectors. Limited export activities further contributed to the subdued market dynamics, as global trade remained constrained. Manufacturers in the region are likely to adopt cautious strategies moving forward, focusing on operational efficiencies and navigating the ongoing challenges in both the automotive and lubricant industries.
For the Quarter Ending September 2024
North America
In Q3 2024, the Polyalphaolefin (PAO) pricing in North America experienced a notable increase, driven by various factors influencing market dynamics. One significant aspect contributing to the rising prices was the gradual recovery in demand from key industries such as automotive, construction, and industrial applications. This uptick in demand, coupled with stable supply levels, created a conducive environment for price escalation. Additionally, the sustained high prices of key feedstocks like Propylene further propelled the upward trajectory of PAO prices in the region.
In the context of the USA, which witnessed the most significant price changes in the region, the overall trend in Q3 was characterized by a positive sentiment. Morever, the quarter-on-quarter increase of 3% indicated a strengthening pricing environment. The price comparison between the first and second half of the quarter, showing a 5% rise, highlighted a notable acceleration in price growth.
As Q3 came to a close, the latest quarter-ending price for PAO stood at USD 2700/MT of Polyalphaolefin 4cSt FOB Oklahoma in the USA, reflecting the overall positive and increasing pricing sentiment observed throughout the quarter.
APAC
In Q3 2024, the Polyalphaolefin (PAO) market in the APAC region experienced a period of declining prices, influenced by several key factors. One significant driver was the subdued demand from various industries, particularly the automotive and lubricant sectors. This weak demand created a scenario of oversupply, leading to downward pressure on prices. Additionally, supply dynamics played a role, with ample inventories and efficient production contributing to the price decrease.
Turning specifically to China, the market witnessed the most significant price changes, reflecting broader regional trends. Moreover, the quarter-on-quarter change of -4% highlighted the ongoing downward trend. A comparison between the first and second half of the quarter revealed a -2% difference, showcasing a consistent decline in prices. The latest price of USD 2640/MT for Amorphous Polyalphaolefin FOB Qingdao in China underscored the prevailing negative sentiment in the pricing environment.
Europe
In Q3 2024, the Polyalphaolefin (PAO) market in Europe experienced a fluctuation in prices, with Germany witnessing the most notable changes. The market was influenced by several key factors, including moderate demand from downstream industries, particularly automotive and industrial sectors. In the latter part of July, the price of Polyalphaolefin (PAO) in the European market experienced a 1.9% increase, driven by a surge in domestic buying activity. This price uptick was influenced by the receipt of new orders from potential customers, which contributed to a tighter supply-demand balance. The heightened interest and increased transactions in the market led to the observed rise in PAO prices during this period. Additionally, supply chain disruptions within the global economy also played a role in this price trend. Interruptions in the availability of raw materials and logistical challenges contributed to tighter supply conditions, further driving up the price of Polyalphaolefin (PAO) in the European market. Compared to the previous quarter in 2024, prices rose by 2%, reflecting a consistent upward trajectory. The second half of the quarter showed a 1% increase from the first half, demonstrating a sustained positive momentum. The quarter-ending price for Polyalphaolefins 4cSt FOB Dusseldorf in Germany stood at USD 2490/MT, highlighting the overall positive pricing environment that characterized Q3 2024 in the European PAO market.
FAQs
1. What is the current price of Poly Alpha Olefin (PAO)?
The PAO price showed a mixed trend in Q2 2025. While prices in Europe and North America declined by 2% and 4% respectively due to weak lubricant demand and elevated inventories, China witnessed stable pricing amid balanced fundamentals.
2. Who are the top PAO producers in North America and Europe?
Major PAO producers include Chevron Phillips Chemical, ExxonMobil Chemical, INEOS Oligomers, and Lanxess. In Europe, producers like Neste and Shell also play a significant role in supplying premium-grade PAO for industrial and automotive applications.
3. What is the PAO Price Forecast for Q3 2025?
PAO prices are expected to remain under mild downward pressure in Europe and North America due to persistent demand softness. However, pricing in Asia may remain stable, supported by steady consumption from the NEV and ICE vehicle sectors.
4. What are the key end-use applications of Poly Alpha Olefin (PAO)?
PAO is primarily used in the formulation of synthetic lubricants, including engine oils, gear oils, hydraulic fluids, and greases. It is also employed in specialty applications requiring high thermal stability and low volatility, especially in the automotive, aerospace, and industrial sectors.
