Asias petroleum wax supply grew at a compound annual rate of 1 percent between 2010 and 2017, a trend which is expected to continue despite an overall decline in global supply, said consultancy Kline & Co. in a webinar.
In 2017 Asia produced approximately 1.8 million metric tons of petroleum wax, or 57 percent of 3.2 million tons of global petroleum wax supply.
Although petroleum wax still dominates the global wax market, its share has been slowly declining as the supply of synthetic and vegetable waxes rising. In the last five to seven years, the share of petroleum waxes has trickled down from over 80 percent to less than 70 percent, Pooja Sharma project manager at the Parsippany, New Jersey-based consultancy noted during the presentation.
Much of the decline is caused by the rationalization of API Group I base oil plants in Europe and the United States due to growing demand for higher quality oils. Asia, however, is not experiencing the same levels of plant closures. In Asia, Group I plants continue to be profitable, and so they also continue to produce petroleum waxes, said Sharma in an interview.
China is the largest producer of waxes in Asia and globally, she told a reporter. The country produced more than 80 percent of petroleum waxes in Asia. All other countries in the region are much smaller producers. China also holds the greatest wax demand.
Over the next five years the petroleum wax market will remain static, Sharma predicts. No significant Group I plant rationalizations have been announced in Europe and [the] U.S. for the next five years, so the supply of petroleum waxes is expected to remain stable at current levels. There will be slight supply increases In Asia, primarily due to refinery process improvements in China, she said.