Waning Petroleum Wax Supplies Creating a Greater Market for Synthetic and Vegetable Waxes, Sees Kline
Parsippany, NJ, (PRWEB UK) 9 July 2013 -- While registering modest growth through 2012, the global wax market continues to be transformed, according to a new report Global Wax Industry: Market Analysis and Opportunities (http://www.klinegroup.com/reports/y635series.asp) by worldwide consulting and research firm Kline & Company. Synthetic waxes are growing rapidly, supplanting petroleum waxes which enjoy a dominant, but declining market share. Hydrogenated and natural vegetable waxes are also making inroads.
The global wax supply is growing at a CAGR of 0.7%. Petroleum waxes represent 73% of global supply, having dropped below 90% for the first time in decades. By contrast, synthetic waxes have increased their global market share to 13%, riding on eroding petroleum wax supplies and growing Fischer-Tropsch and polyethylene wax capacities.
On the demand side, candles still represent 46% of global wax consumption. The growth in electricity grid and use of solar lamps has led to a decline in candle demand for illumination purposes in developing economies. An estimated 80% of candles used today are for decorative or religious purposes rather than for illumination.
Overall demand growth, although modest, is driven by the creation of new end‐uses in rheology, surface and health industry applications, and by economic growth in developing nations. Reduced petroleum wax supplies have created a greater demand for synthetic and vegetable waxes making them the fastest‐growing segments within the waxes market.
The variety of products and applications in the wax market has resulted in a complex pricing mechanism for the wax market. The period between 2008 and 2012 has been characterized by increased price volatility. Crude oil price gyrations during this period coupled with supply and demand mismatch due to recession linked demand contraction and continuing reductions in petroleum wax production have contributed to this volatility. As the global supply of petroleum wax shrinks and the supply of other waxes, including vegetable and synthetic waxes increases, the relative prices of these substitute waxes continue to reflect the relative performance benefits or cost-of-usage of these waxes in comparison to petroleum wax.
Regional supplies of waxes do not conform to regional demands, leading to significant movement of wax across the world. A net wax surplus of more than 1,500 million lbs from Asia, Africa, and the Middle East corresponds with an equivalent deficit in the Americas and Europe, leading to a massive global wax trade. Despite its decreasing market share, petroleum wax still accounts for approximately 97% of both imports and exports.
Pooja Sharma, senior consultant within Kline’s Energy practice, notes “The new dynamic in the wax industry will be the one of change, where the emerging wax supply will be driven by three variables: reducing petroleum wax supply due to Group I plant rationalizations, growth in supply of hydrogenated vegetable wax, and growth in Fischer-Tropsch and polyethylene wax capacity. The overall global wax demand is projected to grow at a CAGR of 1.5% due to an accelerated consumption in the growing economies of Asia, Africa, and the Middle East; and recovery in wax demand from the matured economies of North America and Europe.”
With anticipated strong demand growth and relatively weak supply growth, the global wax market is expected to experience an increasing shortage. The global wax deficit is projected to grow to almost 850 million lbs by 2022.
To learn more about the global wax market, register for a complimentary webinar scheduled for July 17, 2013, 9:00 am EDT. Register here http://bit.ly/18KfPB3.
Kline’s Global Wax Industry: Market Analysis and Opportunities is a comprehensive analysis of the global supply and demand of all waxes including petroleum and other mineral waxes, animal-based waxes, vegetable-based waxes, and such synthetic waxes as Fischer-Tropsch (F-T), alpha-olefin (A-O), and polyethylene (PE) waxes.
About Kline & Company:
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit http://www.KlineGroup.com.
Vera Sandarova, Kline & Company, Inc., +420722018881, [email protected]
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