The PAO (Poly alpha olefins) market price for the APAC region has been stable during the second half of March, as the industry has experienced relatively balanced supply-demand dynamics, backing the firm market conditions.

In the APAC region, the PAO market is upholding a stable price trend, constrained by consistent demand across industries such as automotive, lubricants, and industrial applications. The demand for synthetic lubricants, which heavily depend on PAO, has been on the stable side, mainly in China. However, supply-side challenges persist, as waiting times improved in some ports but increased in Shanghai this week. Fog effects and the arrival of delayed vessels are resulting in berth congestion at these ports. 

In Europe, the price trend is very similar, persuaded by the current push for more fuel-efficient, longer-lasting lubricants in both consumer and industrial applications. Supply dynamics are being affected by restrictions at some of Hamburg’s terminals which leads to difficulties in delivering containers. Also, difficulties encountered by suppliers to obtain delivery slots. The region's use was sustained by the ongoing need for PAO in the automobile industry and industrial uses such equipment greases. To satisfy market needs, the producers are keeping their inventory levels constant. Stable demand also suggests that there is an oversupply in the market. The electric vehicle sales experienced an uptick in demand as the new action plan has been submitted by the European Commission to relax the CO2 emissions due to which the market share for BEVs accounted for 15.4% of all registrations during the month. In comparison to the same month previous year, this represented a 3.4 percentage point (pp) increase. This improvement in EVs reduced traditional fuel vehicle sales and the consumption of PAO remained steady.

In the USA, the PAO market is experiencing consistent prices, due to lesser production costs, and stable cost of crude oil. The automotive sector, especially the EV vehicles saw a significant surge in sales as they handed over 172,754 China-made cars including China shipments and exports to markets. Also, the USA automaker Tesla sold around 78,828 Electric vehicles in March. This improvement in US EVs reduced the consumption of PAO in the market.

In the upcoming months, the PAO market is anticipated to continue to see a slight price increase due to the robust demand in industrial and automotive applications, especially from markets for high-performance and environmentally friendly lubricants. However, market volatility may result from logistical problems like port congestion, changes in the cost of energy and raw materials, etc.