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.
For the Quarter Ending December 2023
North America
The USA market encountered a bearish trend, primarily driven by a reduction in production costs resulting from a decline in the price of upstream crude oil. Additionally, the feedstock Ethylene experienced a notable downturn throughout the quarter, influencing the costs of Polyalphaolefins (PAO). Despite a stable supply of PAO during the quarter, demand from the downstream lubricant industry remained relatively low, resulting in a balanced market situation.
The UAW strike impacted production for three major players in the automotive sector, leading to a moderate to low supply of PAO. The USA market-maintained supply stability, and demand for PAO remained consistent from the downstream automotive and lubricant industry.
However, buyers exhibited hesitation in engaging in bulk purchases, influenced by year-end destocking sentiments among downstream and regional PAO buyers. Additionally, macroeconomic challenges, such as persistent inflationary pressure and elevated interest rates, have weakened the purchasing power of end-users. As the quarter concluded, the price of Polyalphaolefins 4cSt FOB Oklahoma in the USA was recorded at USD 2742/MT.
APAC
The Polyalphaolefins (PAO) market in the APAC region maintained a stable pricing trend during Q4 2023, characterized by slight yet significant fluctuations. This stability was primarily attributed to ample supplies of PAO in the market, low demand from the downstream industry, and the anticipated decrease in the price of essential feedstock, Ethylene. The Chinese PAO market reflected a state of stagnancy due to subdued demand within the downstream automotive and lubricant industry, coupled with low production rates contributing to a decline in prices. The overall market situation was balanced, marked by a stable supply, and limited demand from the international market. Enterprises did not encounter substantial inventory pressures, and purchasing activity remained stagnant after a marginal increase in November. Several companies reported relying on existing stocks as a cost-cutting measure, resulting in a slight decrease in input inventories. Stocks of finished goods saw a marginal increase, partly attributed to the delayed shipment of items to clients. Furthermore, muted demand towards the end of the quarter was influenced by the Christmas holiday. Notably, there were no reported plant shutdowns during this time frame. The quarter-ending price of Amorphous Polyalphaolefins FOB Qingdao in China stands at USD 2853/MT.
Europe
The Polyalphaolefins (PAO) market in Europe experienced only marginal improvement during Q4 2023, maintaining a balanced market situation with moderate supply. The three key factors influencing the market were stagnant demand from the lubricant sector, surplus availability of material, and diminished demand from the downstream industry. In Germany, the market observed a phase of stagnancy characterized by sufficient supplies and subdued demand within the automotive and lubricant industry. Despite this, there was a slight increase in prices attributed to the rising costs of critical feedstock Ethylene, escalating rates of upstream Crude Oil, and elevated energy prices. In the mid and final months, an inclining pattern was observed due to the rise in overseas market demand despite reduced domestic demand. The noticeable surge in demand, especially in the lead-up to the festive season, characterized by heightened consumer activities, including increased purchases in the automotive sector, played a significant role in driving this positive trend. During this period there were no plant shutdowns has been noticed. At the end quarter, the cost of Polyalphaolefins 4cSt in Germany was recorded at USD 2548/MT on a FOB Dusseldorf.
