Independent global consumer markets that use waxes, as diverse as paint and ChapStick, will continue to drive trade values and volumes, Claxton said. But trade patterns are changing because wax supply is tight, and hundreds of countries and thousands of products are competing for wax.

The starting point for the global wax trade is 79 crude oil refineries run by 45 companies in 35 countries, producing slack and fully refined waxes as a coproduct or byproduct of API Group I base oil refining. The big 10, Claxton said, are China National Petroleum Corp., ExxonMobil, Sinopec, Shell, National Iranian Oil Co., LukOil, H&R, Petrobras, PDVSA and Calumet. Together, they produce 70 percent of the worlds wax volume.

Primary producers sell directly to consumer product manufacturers, or to specialty wax refiners, who de-oil slack wax, treat, compound, blend and package waxes for consuming industries. Specialty wax refiners, said Claxton, produce the majority of high-value waxes for the market.

The six largest specialty wax de-oilers are Sasol in Germany, IGI in the United States, Nippon in Japan, Naftowax in Poland, Alborz in Iran and Argentinas Parafina. Dozens of others worldwide join these market leaders in buying feedstock from the primary refiners and competing against them in the sale of finished waxes.

Key consumer products include candles, which account for a whopping 60 percent of global wax demand, wood composites, packaging, plastics, rubber, adhesives, cosmetics and more than a thousand additional applications.

Wax can be the primary component, as in candles; a minor component, for example in board sizing; or a miniscule component, as in auto paint, Claxton noted.

Global Trade
Consumer product manufacturing drives the wax trade, she continued.

Claxton focused on the 8.8 billion pounds per year of crude-derived waxes in her analysis of global trade. In the last five years, from 2003 through 2008, the volume of crude-derived wax in trade has been steady at about 5 billion pounds per year. But the value of that trade has risen steadily from just over $1 billion in 2003 to more than $3 billion in 2008. Values rise with tightening supply, said Claxton.

Fully refined, low-oil-content waxes make up about half of that trade, about 2.6 billion pounds valued at $1.6 billion in 2008. About 44 percent of all fully refined waxes are exported, from 26 exporting countries into 118 importing countries. China dominates global production and exports.

The other half of crude-derived wax trade is high-oil-content waxes (slack waxes and microcrystalline waxes), some 2.7 billion pounds valued at $1.5 billion in 2008. More than 90 percent of these waxes move in trade, Claxton said. Importers make wax products or further upgrade the wax.

Primary and specialty wax refiners in 35 countries sell wax to consumer product manufacturers in more than 120 countries, Claxton summarized. Countries compete for wax imports, and consumer industries compete with specialty refiners for many waxes.

The growth in higher value wax sectors and continued erosion in slack wax supply is disrupting the wax value chain, Claxton continued. Today, fully refined paraffins are moving into the United States, Western Europe and Brazil, where high-end markets are growing fastest. The losers, where fully refined paraffin imports are declining, include Poland, India, Malaysia and Thailand.

Slack waxes are also moving away from the lower value regional applications, particularly in Mexico, India, Malaysia and Thailand, into growth areas such as the United States, Canada and Western Europe – where IGI and Sasol and others add value to the products.

Wax will trade into the highest value sectors, Claxton concluded. And the highest value consumer segments drive wax prices when supplies are tight.