Asia accounted for 46 percent of the globes 10.5 billion pounds of wax supply in 2015 and is the top supplier of several wax types, including petroleum, synthetic and palm.
In the past two to three years, Asia petroleum wax supply has seen an increase, particularly in China, as a result of some capacity expansion and due to completion of a large refinery relocation project, Pooja Sharma, a project lead in U.S.-based consultancy Kline & Co.s energy practice, said during a Feb. 24 web presentation. During the same period, the region saw growth in supply of Fischer-Tropsch waxes from China, as well as vegetable waxes from Malaysia and Indonesia. Going forward, wax supply from the region is expected to remain stable at the current level.
Overall, global wax supply is projected to grow from 10.5 billion pounds in 2014 to 10.7 billion pounds in 2019.
In 2015 petroleum waxes accounted for just under a 70 percent share - about 7.3 billion pounds - though other wax types are growing faster. The Asia region led with close to 3.5 billion pounds of petroleum wax in 2015, Kline found.
The share of petroleum waxes has declined from about 80 percent in 2002 to just under 70 percent in 2015, Sharma said. This is a direct result of the reduction in [API] Group I lubricant base stock-producing plants, especially in North America and Europe. Many Group I base oil-producing plants have either shut down or have been converted into facilities to produce high-quality base stocks, she noted.
As global petroleum wax supplies continue to decline, she said, it will create market space for synthetic and vegetable waxes to occupy. Synthetic waxes such as Fischer-Tropsch and polyethylene wax, as well as vegetable waxes such as hydrogenated soy and palm along with natural palm waxes, represent the fastest-growing products, according to Kline.
For 2015, Kline estimated total synthetic wax supply at more than 1.5 billion pounds. Of that, Fischer-Tropsch wax supply accounted for close to 600 million pounds, while other synthetic waxes - polyethylene, polypropylene and alpha olefin waxes - comprised the remainder. Asia accounted for more than 700 million pounds of this total synthetic wax supply total in 2015.
The study expects Fischer-Tropsch waxes to experience a strong growth in supply in the next five years. This will be a result of some capacity additions by existing players, as well as due to expected commissioning of some new, small-scale GTL plants, she said.
Asia accounts for the largest supply of both Fischer-Tropsch and polyethylene/polypropylene waxes globally, she noted, with some key suppliers located in the region. Fischer-Tropsch waxes - which are closest to petroleum waxes in their physical properties - have picked up demand in the last 5 years, Sharma said, growing at a rate of more than 6 percent per year. Going forward, these waxes are forecast to see significant supply increases in the next five years, thus offering an immense growth potential, she said. This growth will be characterized by an increasing supply of Fischer-Tropsch waxes from South Africa, China and some new small-scale [gas-to-liquid] projects expected to come up in North America.
The study estimated total global vegetable wax supply at 1.2 billion pounds in 2015. Kline found that vegetable waxes continue to expand in the market space for softer waxes, such as slack waxes, which are in deficit in the market right now.
She explained the vegetable wax market is essentially a candle market today, which requires soft waxes. Palm waxes account for nearly half of global [vegetable] wax supply, and Asia is the global leader in supply of palm waxes, she said.
The study is titled, Global Wax Industry: Market Analysis and Opportunities.