Paraffin Wax Prices Explained

Paraffin wax prices surged due to the consistent demand from the Asian and North American markets. Additionally, the commodity’s essential feedstock is on the rise, driving its prices. Increased trading activities and interest from buyers dominate the North American market. Also, ongoing attacks on shipping compelled vessels to divert their routes around the African Cape of Good Hope, resulting in increased voyage durations and freight rates.

Shortage of available material in the market and strong demand from the domestic sector influence the Asian market. On the supply side, unfavorable weather conditions made many producers temporarily suspend their operations, leading to less availability of the material within the region.

Why are paraffin wax prices fluctuating?

1. Crude Oil Prices

Refining crude oil produces valuable products such as gasoline, diesel, jet fuel, and paraffin wax. Thus, when oil prices rise, it generally increases the production costs for the entire refining process. This includes paraffin wax production leading to its higher costs in the market.

2. Production and Refining Capacity

The volume of paraffin wax available for supply to the market depends on the production and refining capacity. When production and refining facilities run at their full capacity, they efficiently meet market demand, contributing to paraffin wax price stability.

Conversely, any interruptions in manufacturing lessen the supply of paraffin wax, potentially resulting in price increases due to its shortage.

3. Environmental Regulations

Environmental regulations frequently mandate that companies adopt cleaner and more sustainable production methods. As a result, meeting these regulations often required substantial investments in technological and process upgrades. These expenses can raise the overall cost of production, potentially resulting in increased paraffin wax prices.

4. Seasonal Variation

Seasonal demand for paraffin wax results in production, inventory management, transportation, and competition adjustments, leading to varying market prices.

For instance, prices rise due to increased production costs, supply challenges, and competition during peak seasons. Conversely, market prices stabilize or decrease as suppliers manage their inventory and offer competitive pricing to maintain the market during periods of lower demand.

Which variables impact the price of paraffin wax?

• Crude Oil Prices
• Production and Refining Capacity
• Environmental Regulations
• Seasonal Variation
• Raw Material Costs
• Supply and Demand

Where does paraffin wax come from?

Paraffin wax is a solid wax that is either white or colorless and is obtained from crude oil through the refining process. Also, it is known for its low reactivity and high melting point which makes it well-suited for candle production, cosmetics, pharmaceuticals, and industrial applications.

Depending on the intended use, paraffin wax undergoes additional refinement and processing to meet specific quality and purity requirements. Here’s how paraffin wax is produced:

1. Crude Oil Refining – Crude oil is separated into its various components through a series of distillation and refining steps.

2. Deasphalting – This is one of the initial steps in the refining process. This method removes the heavier and asphalt-like components from the crude oil, leaving behind a lighter and more desirable fraction.

3. Distillation – The residual fraction undergoes additional distillation. This procedure separates the mixture into distinct fractions according to their respective boiling points.

4. Solvent Dewaxing – To enhance the purity and refinement of paraffin wax, a solvent is employed to eliminate the waxy elements from the mixture. Then, these ingredients are isolated and solidified to create the ultimate paraffin wax product.

What are the uses of paraffin wax?

These are the extensive use of paraffin wax in the following industries:

1. Candle making – It is the primary component used in candle production as it functions both as a source of fuel and as a binder for pigments.

2. Food industry – Also, it finds application in coating fruits, vegetables, cheese, and confectionery items to prevent moisture loss and prolong the shelf life of these products.

3. Cosmetics – Paraffin wax is a versatile ingredient used in the formulation of lipsticks, creams, lotions, and hair care products.

4. Paper industry – It is utilized in the production of wax paper as it offers moisture-repellent properties and structural strength to various paper products.

5. Rubber industry – It serves as an anti-aging, softening, and strengthening of rubber products.

6. Textile industry – It is employed as a gloss-enhancing finish, softening agent, and water-repellent embedding agent in dyeing textiles.

7. Plastics industry – To enhance the characteristics of plastics, like polyethylene, it is used to improve their processability and overall functionality.

What is the future price of paraffin wax?

The demand for paraffin wax in candle production has surged significantly, primarily driven by the rising trend of aromatherapy and home fragrance products. Additionally, increased consumer consciousness concerning home ambiance has contributed to the growing demand for candles, thereby fueling the expansion of the paraffin wax market.

Also, it experiences growth due to the escalating demand for skincare products as this wax holds a crucial position in the personal care and cosmetics industry. Furthermore, the growing preference for convenient foods translates into the need for efficient packaging solutions that help the paraffin wax industry expansion.

Overall, the price of paraffin wax will be $2.01 to $2.28 per kilogram in 2028 and its global market is estimated to reach USD 7.80 billion by 2028, at a CAGR of 5.82%.