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    Market Research

    US Waxes Demand to Exceed $3 Billion in 2019

    ...

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    06.03.15
    US demand for waxes is forecast to grow 1.8 percent annually through 2019 to $3.2 billion. Increases in volume terms will be supported by continued growth in manufacturing and residential construction activity.  However, advances will be limited by a challenging environment for waxes in the packaging industry, as well as weak growth in most consumer and commercial applications.  The supply and market share of different wax types will remain dynamic as changes in the global petroleum refining industry impact the supply and pricing of petroleum derived waxes, as crude oil and natural gas prices impact investment in new capacity for synthetic waxes, and as agricultural commodity prices impact production of natural waxes. These and other trends are presented in Waxes, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

    Developments in the global refining industry will have a significant impact on the composition of the wax market.  According to analyst Joey Lovins, “We expect supply issues for petroleum waxes as major refiners shift away from producing the lower quality base oils from which petroleum waxes are derived.”  Additionally, refiners are increasingly turning to catalytic dewaxing technologies, which do not produce wax as a byproduct.  Limited supplies will continue to support above average growth in petroleum wax prices, and thereby increase the competitiveness of synthetic and natural wax alternatives.  The use of synthetic waxes as additives to create high-performance, low-cost wax blends is expected to be a major area of focus for product development.  While synthetic waxes will generally benefit from the shift toward higher quality base oils by refiners, synthetic Fisher-Tropsch waxes will face their own supply shortages due to the delay or cancellation of new gas-to-liquids (GTL) projects in the US following the collapse of crude oil prices in 2014.

    Natural waxes will remain the smallest segment of the market, with growth expected for some consumer applications such as candles and firelogs.  Consumer preference for environmentally friendly products or formulations and the expanding use of cheaper natural wax types -- especially hydrogenated palm oil, the least costly natural wax -- will support this growth.  Volatility in the supply and cost of natural waxes will remain the most significant factor limiting more widespread adoption of these products.

    Waxes (published 05/2015, 265 pages) is available for $5200 from The Freedonia Group, Inc.
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