The Asian market players negatively revised the Gear Oil quotations in December 2024 amid firm availability of supplies and moderate to low offtakes. In Singapore, Gear Oil supply and demand remained stable, supported by firm inventory levels and stable production rates. While production benefited from moderate feedstock availability and strong order backlogs, experts caution that geopolitical tensions and trade uncertainties could disrupt output in the coming months. Demand for Gear Oil remained moderate, driven by resilient external demand, especially in electronics. However, risks such as geopolitical tensions could weaken demand, leading to increased inventory levels and a forecasted price reduction in early 2025.

Gear oil supply and demand in Singapore remained ample through December 2024, with firm inventory levels and stable production rates. The Gear Oil production was supported by excess availability of feedstock base oil despite the upward trend in crude oil prices driven by a larger-than-expected U.S. inventory drawdown and positive expectations for China’s economic growth. Lower feedstock Base oil prices have lowered the production costs during this timeframe which led manufacturers to revise Gear Oil offers negatively.

At the same time, Gear Oil output in Singapore benefitted from a steady flow of new orders and order backlogs, ensuring continued production momentum. However, experts warn that geopolitical tensions and trade uncertainties could disrupt output rates in the coming months, especially as the effects of front-loading diminish.

On the other hand, demand for Gear Oil remained moderate in Singapore’s manufacturing sector in December 2024, amid expansion and resilient external demand, especially in electronics. Electronics showed slower growth, but overall, the sector has experienced months-on-months of expansion. However, the year-end destocking has led manufacturers to provide discounts which declined the Gear Oil prices.

However, potential risks, such as geopolitical tensions and trade disruptions, may moderate demand for Gear Oil in the medium term. These external uncertainties may result in reduced industrial activity and weaker demand, particularly from key sectors such as manufacturing and automotive. As a result, inventory levels are anticipated to increase, with a build-up of unsold Gear Oil in the market. This surplus, coupled with lower off-take rates, is expected to exert downward pressure on Gear Oil prices. Consequently, industry experts forecast a price reduction at the beginning of 2025, as supply exceeds demand and market adjustments take place in response to these changing dynamics.

Despite these uncertainties, the outlook for Gear Oil orders remains positive from February 2025, supported by resilient external demand, strong export orders, and order backlogs. With experts predicting sustained growth in the first quarter of 2025, the manufacturing sector’s strong performance offers a promising, though cautious, market for Gear Oil.