For the Quarter Ending March 2024
North America
In the first quarter of the US market, Gear Oil prices experienced an upward trend, mirroring the increases seen in both its feedstock, Base Oil, and its upstream source, Crude Oil. This price trend was supported by a moderate supply and strong demand for Gear Oil, driven by improvements in the downstream automotive and industrial sectors.
The automotive industry, a major consumer of Gear Oil, showed signs of recovery and growth, leading to increased demand for lubricants. Similarly, the industrial sector, which relies heavily on machinery and equipment that require Gear Oil for lubrication, also contributed to the strong demand.
The increasing pattern of Base Oil and Crude Oil prices further pushed up the cost of producing Gear Oil, adding to the upward pressure on prices. However, despite the rising prices, the market dynamics remained balanced, with supply able to meet the strong demand. This overall positive environment in the US market for Gear Oil in Q1 reflects a robust performance in the automotive and industrial sectors, suggesting a healthy outlook for the rest of the year.
APAC
In the first quarter of the year, the Asia-Pacific (APAC) region, particularly India, witnessed an increase in the prices of Gear Oil. This price trend was in line with the rising pattern of its feedstock, Base Oil, and its upstream component, Crude Oil. The supply of Gear Oil remained moderate, while demand was strong, driven by improvements in the downstream automotive and industrial sectors in India. The automotive sector, a key consumer of Gear Oil, showed signs of recovery and growth, contributing to the increased demand for this lubricant. Similarly, the industrial sector, which relies on Gear Oil for various machinery and equipment, also experienced improvements, further boosting demand. The strong demand for Gear Oil, coupled with the increasing prices of its feedstock and upstream components, led to the overall increase in Gear Oil prices in the APAC region, particularly in India. This trend underscores the importance of monitoring feedstock prices, supply dynamics, and downstream sector performance in understanding the price movements of lubricants like Gear Oil in key markets.
Europe
In the first quarter of the German market, Gear Oil prices followed an upward trajectory, aligning with the increasing patterns observed in its feedstock, Base Oil, and its upstream source, Crude Oil. Despite this, the supply of Gear Oil remained at an average level, while demand was moderate. The automotive sector, a key consumer of Gear Oil, showed signs of improvement in Q1, driving some demand for lubricants. However, the overall demand remained moderate, limiting the upward pressure on prices. The increasing prices of Base Oil and Crude Oil contributed to the rising production costs of Gear Oil, further impacting its price trend. Despite the challenges, the market maintained a balanced supply-demand dynamic, with supply meeting moderate demand. The improved performance of the downstream automotive sector in Germany provided some support to the market, indicating a positive trend for Gear Oil in the region. Overall, while the market saw price increases, the moderate demand and average supply levels in Germany's Gear Oil market suggest a stable outlook for the near future.
