For the Quarter Ending December 2022
North America
The prices of Polyalphaolefin (PAO) in the US market declined during the fourth quarter of 2022 as reflective of the decreasing price trend of upstream Ethylene in the domestic market. The poor demand from the downstream automotive sector abetted the easing price trend of PAO in the American market. The increased production rates of feedstock in the American market to meet European demand, along with reduced exports rates through freeport owing to maintenance work, led to a rise in the availability of natural gas in the US market and eventually eased the operation costs in PAO manufacturers during Q4 2022 abetting the US PAO price trend.
APAC
The poor performance of the downstream automobile in the Chinese market throughout the fourth quarter of 2022 drove down the prices of Polyalphaolefin (PAO) in China during the entire Q4 of 2022. The price of upstream Ethylene was relatively stable in China throughout Q4 2022, but the poor demand caused by the weak economic situation and rising covid-19 restrictions was the primary reason behind the weakening price trend in the Chinese market. PAO prices in the Indian market followed a very similar trend to that of Chinese PAO prices. The downstream automotive performance in the Indian market was comparatively better than various markets but still was not able to raise the price trend of PAO in India during Q4 2022.
Europe
Polyalphaolefin prices in the European region rose slightly during the first half of the fourth quarter of 2022 due to high energy prices and rising feedstock natural gas costs. Despite the poor performance of the downstream automotive sector in the European region during Q4 2022, the rising operation cost drove up the prices during the first half of Q4 2022. However, the inventory of feedstock natural gas in Europe was strong, and the demand for heating purposes was not as high as expected during the start of December, leading to the easing of natural gas and ultimately easing to operation cost of PAO during the second half of Q4 2022. Poor demand and easing operation costs led to reducing prices of PAO in Europe during the end of Q4 2022.
For the Quarter Ending September 2022
North America
The prices of Polyalphaolefin (PAO) in the American market decreased during the start of the third quarter of 2022 due to the declining performance of the automotive sector in the US. The declining demand for feedstock Ethylene in the US market abetted the declining trend of PAO at the start of Q3 2022. The trend of PAO prices in the US took a turn during the second half of Q3 2022 as demand for feedstock in the US started to rise with the improving performance of the downstream automotive sector. The price of PAO in the US during the end of Q3 was recorded at around USD 3732/MT.
APAC
The prices of Polyalphaolefin (PAO) in China increased throughout the third quarter with slight increases on a monthly basis. Despite easing ethylene costs and poor demand from the downstream automotive sector, PAO prices increased during Q3 2022 due to steady demand from the EV sector in China. The decreasing price trend of ethylene during the start of Q3 2022 in the Indian market abetted the price rise. However, the rising price of feedstock ethylene in the domestic market caused PAO prices to rise during the second half of 2022 in India. The price of PAO during the end of Q3 was recorded at around USD 4152/MT in China.
Europe
The price of Polyalphaolefin (PAO) has been steadily decreasing throughout the third quarter of 2022 on the back of the poor performance of the downstream automotive sector in the continent. The Ethylene price in the Europe region was dull throughout the third quarter of 2022, which abetted the declining price trend of PAO throughout Q3 in Europe. Due to high energy prices, the operation rates of the downstream Automotive sector in several European countries were low, declining the demand for the PAO in the European countries during Q3 2022. The price of PAO at the end of Q3 2022 in Germany was recorded at around USD 3336/MT.
For the Quarter Ending June 2022
North America
Prices of Poly Alpha Olefin (PAO) in the American market have gradually risen throughout the second quarter of 2022. The cost of PAO drove up along with the rising production in the downstream automotive sector. The American automotive industry overcame the chip shortage by the end of the first quarter of 2022 and improved production, resulting in raised demand for PAO during Q2 2022. The rising price of upstream ethylene in the US market abetted the uprising trend of PAO in the American market. The rise in ethylene price was due to increased crude oil costs in the domestic market due to the supply disruption caused by the ongoing conflict in the East European region.
APAC
In the Indian market, the price of Poly Alpha Olefin (PAO) witnessed a surge. The production in the downstream automotive sector in India improved steadily in the second quarter, influencing the trend of PAO prices in the Indian market. During China's second quarter of 2022, the PAO price trend rose during the second quarter of 2022. The increased production in the downstream automobile sector, especially the hike in Electric Vehicle sales in China, increased PAO demand and price in Q2 2022. Electric vehicle sales and production in China rose tremendously, especially during Q2, significantly contributing to the demand increase for PAO in the Chinese market.
Europe
The price of Poly Alpha Olefin PAO in the European market dropped till mid-Q2 2022 due to the poor performance and production of the downstream Automotive industry. From the end of the second quarter of 2022, the PAO prices started to increase despite the poor performance of the downstream automotive industry on the back of high upstream ethylene prices in the domestic market. The poor production in the automotive sector in the continent is primarily due to the ongoing energy crisis caused by massive supply disruptions of Natural Gas in Europe. The price of PAO in the German market during the end of Q2 saw a significant hike as the continent is eyeing to improve its Electric vehicle production.
For the Quarter Ending March 2022
North America
Prices of Polyalphaolefin (PAO) in the American market stayed buoyant throughout the first quarter of 2022. ExxonMobil oil refinery recently experienced a fire accident in late December 2021 leading to higher prices of upstream Ethylene. The downstream automotive industry in the US especially the EV sector is booming and abetting the rising price trend of PAO in the US market. Unlike other regions, the American automotive industry recovered from the chip shortage in mid Q1 of 2022 which boosted the production of automotive and led to higher PAO prices. Prices of PAO in the US market at the end of first quarter of 2022 were assessed at USD 3260/MT in March.
Asia Pacific
The prices of Polyalphaolefin (PAO) in the Indian market dropped in the Q1 of 2022, as the production in the downstream automotive industry was halted due to high shortages of circuit chips. Weak sentiments in the automotive sector reduced the demand for PAO gradually lowering its prices. The prices rose by March as the automotive sector made a slight comeback and was recorded at USD 4885/MT in the end of Q1 2022. The Chinese automotive industry didn’t get afected by the lockdowns in January and was able to meet the needs of its regional market and it had stabilized the price trend for Q1 2022. Prices of PAO in China were recorded at USD 3515/MT during March of 2022.
Europe
Polyalphaolefin (PAO) in Europe was one of the commodities which witnessed one of the most underwhelming performances in the first quarter of 2022. The downstream automotive sector had very poor productions owing to the energy shortages and transportation disruption caused by high energy prices on the account of ongoing war between Russia and Ukraine. The war even caused disturbances and difficulties in the imports of the upstream ethylene which further led to the downward trend of PAO prices. At the end of the Q1 of 2022 the prices of PAO dropped up to USD 4170/MT in the German market in March.
For the Quarter Ending December 2021
North America
Polyalphaolefins, which constitute the Group IV base oils, experienced the highest surge in demand from the lubricant industry in comparison to Group I and II oil in the North American region, causing the market prices to escalate in quarter four of 2021. The raw material tightness and insubstantial productions at still recovering facilities post damages from the Ida hurricane in the Gulf coast of the USA supported the price rise in the USA market. The prices dwindled briefly in early December owing to the pressure-relieving efforts by the USA government opting for strategic release of the upstream crude oil inventories. However, the demand driving fundamentals from the lubricant industry eventually prevailed causing the prices in December to range between USD 2900/MT to 3100/MT FOB Oklahoma.
Asia
The Polyalphaolefin prices in the Asian market skyrocketed throughout the fourth quarter backed by strong ethylene feedstock amid soaring upstream crude oil prices in the international market. The alternate upstream source, natural gas, also remained tight during the major portion of the quarter which elevated the input costs in Japan and South Korea and also escalated the import prices in China. The spike in freight charges over container crisis at ports coupled with restrictions imposed by the Chinese government in compliance with its zero-covid policy delayed Polyalpholefin consignments in reaching the China downstream market, hence causing the prices to settle around USD 3683/MT in December. In India, the wrath of raw material tightness and surge in freight charges rose the Polyalphaolefin prices during October month. However, a cap in December prices, hovering between USD 4881/MT and USD 5291/MT, was observed on account of relief in the upstream market and dullness in downstream demand.
Europe
The frenzied upstream natural gas market, as well as low inventories of crude oil exerted astoundingly high pressure on the Polyalphaolefin market in the Europe, encouraging the manufacturers to keep their contracts on the higher side during the whole of October and till mid-November. The operational constraints due to energy shortage also supported raised prices in Germany. However, the retraction in natural gas and crude oil prices over time brought bearishness in the price trend in December. The demand from the lubricant industry projected stability, causing the Polyalphaolefin prices in Germany to settle around USD 4820/MT during December.
For the Quarter Ending September 2021
North America
The prices of PAO witnessed a significant surge in the domestic market of North America during Q3 of 2021. Increasing energy prices in the USA had an adverse impact on the cost of production of PAO which translated into the hiked prices of PAO across the region. Leading producers were observed making substantial price hikes on the material in order to maintain the margins during the quarter. The occurrence of Hurricane Ida hamstrung the production of crude oil and natural gas which has contributed to the curtailed production of PAO along with other factors during the quarter.
Asia Pacific
The domestic market outlook of Polyalphaolefin witnessed an upward trajectory in the Asia Pacific region in the third quarter of 2021. In India, the pricing trend of PAO showcased consistent improvements in Q3. Despite dull market fundamentals, the pricing of PAO rose considerably under the international pressure across the country. CFR JNPT (India) pricing escalated from USD 3225/MT to USD 4349/MT from July to September. Global rise in the prices of raw materials further affected the PAO pricing in the Asian markets, despite of nil demand from downstream lubricant sectors. There were several other reasons behind this rise, like rising production cost due to global inflation, soaring freight costs, and shipping charges, etc.
Europe
In the European region, the demand outlook of PAO experienced an uptrend in the domestic market in Q3 2021 on the back of the consistent demand from the downstream lubricants sector. As European economies were recovering from severe effect of COVID-19, a major spike in the demand for PAO from downstream segments was observed across Europe. Furthermore, prices of PAO were assessed at more than USD 4700 per MT in the last month of Q3 2021, on the back of disrupted supply supported by limited production of PAO in Europe.
