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.
For the Quarter Ending March 2024
North America
During the initial quarter of 2024, the North American region encountered a stable to bearish market scenario for Polyalphaolefin (PAO), influenced by various factors. Notably, a decrease in fresh orders from potential customers, who were primarily managing operations based on existing stock levels, played a significant role. Moreover, disruptions in the supply chain coupled with adverse weather conditions further dampened demand conditions, contributing to a subdued market atmosphere.
The downturn in demand from the downstream lubricant manufacturing sector exacerbated the bearish market situation. However, the USA, being the primary market for PAO in the region, witnessed moderate demand despite constrained supply, attributable to regular buying activities.
The price of PAO in the USA during this quarter stood at USD 2480 per metric ton for Polyalphaolefin 4cSt on a Free on Board (FOB) basis in Oklahoma. Comparing these prices to the same quarter of the previous year revealed a percentage change of 17%. The market experienced an oversupply situation, with demand for the product primarily fulfilled by existing stock levels.
APAC
The Polyalphaolefin (PAO) market in the Asia Pacific (APAC) region-maintained stability during the first quarter of 2024. The market was influenced by various factors, including stable demand from lubricant manufacturers, a weak performance in the downstream automotive industry, and a sufficient supply of PAO in the Chinese market. In China, there was a decline in fresh orders as merchants focused on managing their operations based on existing stock levels. This resulted in a decrease in the operating rate of domestic PAO enterprises, although the industry equipment load remained sufficient. It is expected that restocking will take place in the following months of the year. Thankfully, no plant shutdowns were reported during this quarter. Overall, the APAC PAO market remained stable during the first quarter of 2024, with China playing a crucial role in the pricing dynamics. The market was affected by weak demand from the downstream automotive industry, ample product availability, and merchants managing their operations based on existing stock levels. Fortunately, no plant shutdowns occurred during this period.
Europe
In the European region, Polyalphaolefin (PAO) pricing witnessed a bearish trajectory in the first quarter of 2024, primarily attributed to weak demand from downstream lubricant manufacturing industries. Despite external factors such as cost pressures and fluctuations in raw material prices, the market experienced subdued demand conditions, which effectively kept prices stable. Notably, the German market observed a decline in demand from the downstream automotive sector, resulting in reduced orders from potential customers. Additionally, fresh concerns have emerged over Germany's export industry due to trade disruptions arising from Houthi attacks on shipping in the Red Sea, introducing further destabilization. These attacks have introduced new challenges to Germany's international trade dynamics, raising uncertainties about the resilience of its export sector. Analysis of Germany's market performance in Q4 revealed a -15% change compared to the same period last year, a -2% change from the previous quarter, and a -9% change in price percentage comparison between the first and second half of the quarter. As for the current quarter, the recent price of Polyalphaolefins 4cSt Free on Board (FOB) Dusseldorf in Germany stands at USD 2486 per metric ton.
