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.
For the Quarter Ending June 2024
North America
The price of PAO in the US market remained stable in the second quarter of 2024 due to the weak orders from the downstream lubricant sectors. Despite an improvement in the downstream automotive industry, the demand for PAO in the lubricant sector remained weak. The merchant in the US market had sufficient supply to meet the domestic requirements. During this period, balanced demand and supply chains played a crucial role in maintaining price stability. The petroleum industry, a key downstream sector, exhibited moderate demand, contributing to the equilibrium in PAO pricing.
Expected seasonal fluctuations, such as the Atlantic hurricane season, led downstream market participants to adopt cautious procurement strategies, ensuring their stockpiles were sufficiently padded against potential disruptions.
In the USA, which experienced the most pronounced price activities during this period, PAO prices remained fundamentally stable. This reflected a stable sentiment in the PAO market, indicating neither positive nor negative volatility but rather an equilibrium maintained by balanced supply-demand dynamics and prudent inventory management. Hurricane Beryl halted industrial production in the USA in June 2024, and floods further disrupted downstream demand in the petroleum industry.
APAC
In the second quarter of the year, the price of Polyalphaolefin (PAO) remained stable in the Asian market. Despite fluctuations in other chemical markets, PAO managed to maintain its pricing equilibrium, reflecting a period of relative calm. This stability can be attributed to a balance between supply and demand dynamics within the lubricant sector, where PAO is a critical component. Demand for PAO in the lubricant sector was only average during this period. Various factors contributed to this moderate demand. The automotive industry, a major consumer of PAO-based lubricants, experienced a steady but unspectacular period of activity. While there were no significant spikes in automotive production or sales, the industry maintained a consistent output, which translated into a steady but unspectacular demand for PAO. Additionally, industrial applications of lubricants saw a similar trend. The manufacturing sector, another significant user of lubricants, operated at a consistent pace without notable increases in activity that might have driven up PAO demand. At the end of quarter, the PAO 8Cst price stood at USD 4378/MT Ex-Mumbai basis.
Europe
In Q2 2024, the Polyalphaolefin (PAO) market in Europe exhibited remarkable stability, with supply and demand dynamics maintaining a fine balance. The primary factors contributing to this equilibrium included ample supply, moderate demand, and improved supply chain logistics, which collectively prevented significant price fluctuations. Additionally, subdued downstream procurement, particularly from the lubricant sector, kept the market from experiencing substantial price changes. Despite improvements in the automotive industry, the demand for PAO remained lukewarm due to economic uncertainties and high-interest rates, which dampened purchasing enthusiasm. Focusing exclusively on Germany, the market saw the maximum price changes within the region. Overall trends indicated a stable pricing environment, largely driven by the same supply-demand balance observed across Europe. Seasonality did not significantly impact market prices, as the industry's cautious approach to inventory management kept fluctuations minimal. Concluding the quarter, the PAO 4cSt FOB Dusseldorf price stood at USD 2440/MT. This stable sentiment throughout Q2 2024 reflects a generally neutral pricing environment, characterized neither by significant positivity nor negativity.
