India May Challenge Chinese Wax Suppliers

MUMBAI - China continues to dominate the global wax market, but Indian suppliers are increasing sales domestically and abroad and could provide competition to Chinese companies in coming years, an industry insider said at a conference last month.

Indias wax exports increased in recent years, and imports decreased after the government-run Numaligarh Refinery Ltd. commissioned the countrys largest wax-producing unit in March 2015, said Rohan Goel, a partner at Prem Oil Group, a New Delhi-based wax and lubricants distributor.

Since selling its first lot in July 2015, NRL has grabbed more than 45 percent of the domestic wax market, Goel said. The companys plant, located in the northeastern state of Assam, has the capacity to make up to 50,000 metric tons per year of paraffin wax and microcrystalline wax.

Within a short span of time, NRL wax has been able to penetrate the wax market across India and abroad, Goel told attendees at the Asia, Middle East and Africa Base Oil, Lubricant and Wax conference on Aug. 2. He said the company exports wax to countries such as Myanmar, Nepal, Kenya, Mexico, Bangladesh, Sri Lanka, Indonesia, China, Thailand, Egypt, Uganda, the United States, Brazil, and Portugal.

Apart from NRL, the other two major wax refineries in the country are operated by Indian Oil Corp. Ltd. and Chennai Petroleum Corp. Ltd., with production capacity of 33,000 t/y and 23,000 t/y, respectively, Goel said.

He stated the country still depends on imports to meet a large chunk of its wax requirement because its current capacity is less than demand. The country imports wax from China, Iran, the United Arab Emirates, Egypt, Malaysia, Germany and South Africa to meet its domestic demand of over 127,000 t/y.

Goel said NRLs domestic wax sales stood at 46,000 tons and exports at 5,800 tons in fiscal year 2017-2018, up from 17,000 tons and 200 tons, respectively, in fiscal year 2015-2016,. He added that domestic sales and exports are projected to reach 49,000 tons and 7,000 tons in fiscal year 2018-2019.

Indias wax export price in July was at U.S. $1,150/ton free on board at Kolkata, up from U.S. $1,060/ton in January, he said.

Wax is used in a wide range of industrial and commercial applications, from candles, disposable tableware, textiles, paper products and corrugated board to packaging, pharmaceuticals, chewing gum and crayons.

Goel said China is still the leading supplier, but theres a lot of growth potential for India given the expected rise in global wax demand.

The global wax market is expected to reach approximately $13 billion by 2025, growing at a compound annual rate of about 4 percent from $9.3 billion in 2016, Goel said. There is rising demand for the product owing to its high gloss, non-toxicity, good water repellency and outstanding chemical resistance, he added.

Asia-Pacific will continue to be the region that consumes the most wax, driven by growth from China and India as well as the emerging markets of Malaysia and Indonesia, Goel said. He cited growing demand for printing ink on account of the expanding packaging industry as one source of increased wax consumption.

Candles, the fastest growing segment due to new decorative and therapeutic uses, account for the largest share of the market and are expected to remain so in the future, Goel stated.

He said theres demand for new types of fragrance candles and decorative candles from the U.S. and Europe, but demand for candles in India is coming down due to rising electrification in the rural areas.

Addressing the topic of wax production capacity, Goel downplayed the likelihood of new wax de-oiling plants being built in India, stating that building costs are high and wax import prices low. However, refiners could increase capacity through debottlenecking, he added.