Europe was the second-largest supplier of wax in 2019, remaining a significant supplier of petroleum waxes while showing strong growth in synthetic polymer waxes and vegetable waxes, an analyst said recently.
Global petroleum wax supply has declined over the past few years, according to Pooja Sharma, a project manager at Kline & Co.’s energy practice, who pegged the number between 7 billion and 8 billion pounds during a an April 16 webinar. Such waxes are extracted as a byproduct in the production of Group I base oils.
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The petroleum variety still accounted for 66 percent of all wax supply in 2019, though that’s down from 70 percent in 2014. Synthetics accounted for 16 percent, up from 14 percent in 2014, and, and vegetable waxes for 13 percent, up from 11 percent in 2014. Types of synthetic waxes include Fischer-Tropsch, polyethylene and alpha olefin waxes. Some common applications include polyvinyl chloride and candles. Animal and other waxes remained at 5 percent last year, unchanged from 2014.
“While the supply of petroleum waxes has been declining, the supply of synthetic and vegetable waxes has been growing,” Sharma noted. “These wax types have experienced exponential growth in the regions over the past decade and have taken up the market space vacated by petroleum waxes.”
She pointed that, “in contrast to Asia, petroleum wax supply in other regions, such as North America and Europe, has seen significant decline. The supply of petroleum waxes has been declining for more than a decade in these regions as a result of [API] Group I plant rationalizations.”
Europe experienced one of the highest Group I plant rationalizations over the past 10 years, the study found. Sharma cited examples such as BP’s plant in Coryton, United Kingdom, Cepsa’s plant in Spain’s Huelva province and Petroplus’s plant in Petit-Couronne, France.
“The past decade has seen a global trend toward declining Group I base stock demand due to the reduced demand for lubricants formulated using Group I base stocks,” Sharma said. “In particular, the automotive lubricant market globally is moving away from using Group I base oil for finished lubricants. These markets are increasingly moving towards higher or better quality base oils such as Group II/II+ and Group III/III+.” As a result, Group I plants have either closed or been upgraded to higher API grades.
Petroleum wax supplies in Europe and North America in the past several years have given way to alternative types in the regions, particularly synthetic and vegetable waxes.
“These waxes have seen quite significant growth between 2010 and 2019,” she said. “In fact, over the next five years as well the supply of petroleum waxes from North America and Europe is forecast to decline further, at annual rates between 1 to 3 percent.”
Synthetic waxes, as well as vegetable waxes like hydrogenated soy and palm, and natural palm waxes, were the fastest growing wax supply categories in Europe. From 2010 to 2019, Europe posted a 33.7 percent compound annual growth rate in vegetable wax supply and a 5.5 percent annual increase in synthetic wax supply. Meanwhile, Kline estimated petroleum wax supply declined at a compound annual rate of 2.8 percent from 2010 to 2019, declining from around 1.7 billion pounds to around 1.5 billion pounds.
Kline ranked several companies from Europe and Africa among the top 10 petroleum wax producers. South Africa’s Sasol ranked fourth, Iran’s Sepahan Oil was eighth and H&R Group of Germany placed ninth.
The study’s list of 13 top non-petroleum wax suppliers included German chemical company BASF in sixth place and specialty chemical company Clariant of Switzerland in eighth place.
The study was recently published and is titled, “Global Wax Industry: Market Analysis and Opportunities.”