Industrial wax Market

[242 Pages Report] The Industrial wax market was USD 7.3 billion in 2020 and is projected to reach USD 8.9 billion by 2025, at a CAGR of 4.0% from 2020. This is due to the growing demand for industrial waxes from various applications such as candles, cosmetics, and tire & rubber. The candle market is the largest application segment of industrial waxes. Colored candles and candles with fragrances are gaining more importance in home decore industries for ambiance improvement and other purposes. Bio-based wax demand is growing in food, packaging, cosmetics & personal care, and other applications, due to environmental regulations in developed regions such as North America and Europe. Growing population and faster GDP growth rates in countries such as China, India, and other Asian countries boost the industrial wax market growth.

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COVID-19 pandemci and Declinign oil prices Impact on the Global Industrial Wax Market

COVID-19 pandemic has severely impacted most of the North American and European countries, especially the U.S., Italy, Spain, the UK, France, and Germany. The suspension of manufacturing activities and disruption of the supply chain has resulted in a decline for industrial wax from these countries. The impact was further intensified by declining oil and gas prices. Further, declining demand for cosmetics, candles, and consumer products across the globe wherein the wax is used has resulted in a slump in industrial wax demand across the globe.

Industrial wax Market Dynamics

Drivers: Steady growth in candle production with product advancement across the globe, a key to market growth

Traditionally, the candles were used as a lightening tool only; however, now, it plays a pivotal role in the festival ceremonies, home decoration, and handicrafts. In European and North American countries, many candles are used daily and even at festival ceremonies due to their religious beliefs, lifestyle, and living habits. With the candle product advancement, such as product shape, style, color, and fragrance, customers are fascinated to buy these products. Changing consumer behavior and the growing popularity of candles based craft materials and related decoration and interior designing has translated the traditional candle industry into an advanced, innovative, and brand-conscious industry.

In candle manufacturing, industrial wax, such as paraffin, microcrystalline and synthetic wax, is the main raw material. To support sustainable development, the advancement of products, and to impact aesthetic/design in the products, the traditional paraffin wax is now replaced with microcrystalline and synthetic wax in candle manufacturing.

 The candle industry has evolved steadily over the recent past, and most of the manufacturing facilities have shifted towards the Asia Pacific region. According to Eurostat, over 657 kilotons of candles were produced in the EU-28 countries, whereas import of the candles had grown by 2.7% in the same year. It has been observed that, in the top 10 importers of candles, the U.S. and nine European countries accounted for 16.5% and 46.5% of overall imports. In contrast, China and Poland had accounted for 26.2% and 26.9% of overall export. Thus, with the candle segment's steady growth, industrial wax demand is expected to increase steadily over the forecast period.

Restraints: Declining usage of paraffin wax in the packaging application

The demand for industrial wax in packaging applications is significant in North America and Europe. However, the trend is going towards declining demand for packaging. Food packaging industries nowadays are more concerned about the health hazards of paraffin wax used in food packaging. The use of natural waxes is thus increasing in the food packaging industry in North America and Europe. Moreover, the government authorities such as FDA and European Union had levied regulations pertaining to the use of industrial waxes. The growing demand for natural waxes can also be attributed to the growing meat packaging industry.

Opportunities: Rising demand for bio-based products in the cosmetic industry

With the growing concern about health and wellness, the people in developed countries have shifted their preference from synthetic products to green or bio-based products. Due to these, several cosmetics, as well as personal care products manufacturers, have started developing products based on bio-based products. Thus, the demand for bio-based waxes such as carnauba wax, beeswax, and candelilla wax, among others, is gaining traction in cosmetic and personal care product manufacturing and replacing synthetic and paraffin wax. In October 2017, Burt's Bees (U.S.) had launched beeswax-based balms and other cosmetic products lined, and currently, in 2020, they are selling one balm per second across the globe.

Challenges: The US-China trade war implications on the market

To supports the domestic paraffin wax and candles business, the U.S. government had imposed anti-dumping duty on Chinese candle products. Under this, the candles irrespective of the shape and size, the U.S. government has sanction anti-dumping duty of 108.3% on the Chinese candle products. This, in turn, significantly impact the industrial wax market.

Ecosystem Diagram

Fossil based segment is estimated for a larger market share in 2019.

Fossil based wax such as paraffin and microcrystalline account for the majority of market share for industrial wax. The steady growth in demand from end-use industries such as candle, packaging, cosmetic, and coatings, among other supports for the growth of the market. Paraffin wax is mainly consumed across these industries due to abundant availability, low cost of the product, ease of production, suitability to several industrial applications, and performance characteristics. Their applications in various industries include rubber, textiles, wood coatings, paper & printing, industrial coatings, and constructions. Moreover, microcrystalline waxes are widely used in cosmetics, food, packaging, coatings, and other industrial applications.

The candle industry is estimated to have the largest share in the industrial wax market.

In terms of demand, a major chunk of the global industrial wax market is notched by the candled segment. The wax is the main constituent of the candle. With the changing consumer preference, lifestyles, and habits, the key manufacturers are focusing on the development of new products to attract customers. According to the National Candle Association, around 35% of the overall candles are sold during the Christmas/Holiday season, whereas 65% are sold during the rest of the year. Over 10,000 different types of candles are available in the market. In the market, candles are available in a variety of shapes and sizes, ranging from floating, tapers, pillars, jar candles, and birthday candles, among others.

In terms of production, China has significant production capacities and export over half of the total production to North American and European countries. It has been observed that the import of candles in European and North American countries has increased significantly in the past five years. This is mainly attributed to the low cost of production, availability of raw materials, low utility cost, and low labor cost, owing to which production of candles in APAC has been increasing significantly.

Moreover, the incorporation of the candles in decorative products such as a chandelier, vas, etc. is trending, and gaining demand from consumers in home decor. Thereby, being an indispensable part not only of the religious festivals but also the decoration industry, the demand for industrial wax is expected to increase steadily. However, due to the COVID-19 pandemic, the demand for the candles has slumped owing to a lockdown of the cities, suspension of manufacturing operation, disruption of the supply chain, declining consumer spending, and declining per capita income. This, in turn, impacts the demand for industrial wax from the candle manufacturers.

APAC is projected to account for the largest share of the industrial wax market during the forecast period.

Asia-Pacific has the largest share in the market due to growing economies such as China, India, Japan, and other Asian countries like South Korea and Indonesia. The Asia-Pacific has the largest market for the candle industry. Within Asia, China dominates the market for candles and the packaging industry. The growth is led by rapid industrialization, growing demand from various applications, and growing per capita income in these regions. The growing demand for candles is derived from decoration, religious belief, and various lifestyle and living habits. North America is the largest market for synthetic waxes. The increasing range of applications for synthetic waxes is driving the demand in the region. Due to environmental regulations in developed countries such as Europe and North America, the demand for bio-based waxes is increasing in the candles and food packaging industry for this region.

Key Market Players

Key players such as ExxonMobil (U.S.), Royal Dutch Shell PLC (Netherlands), Sinopec (China), Sasol Ltd (South Africa), CEPSA (Spain), Hollyfrontier Corporation (U.S.),Calumet Specialty Products Partners (US),Gandhar Oil refinery (India), Numaligarh Refinery Limited (India),  Petróleo Brasileiro (Brazil), The PJSC Lukoil Oil Company (Russia). are the top 10 manufacturers are covered in the industrial wax market. They have adopted various strategies to expand their market presence and enhance their growth prospects for the industrial wax market.

Scope of the report

This research report categorizes the Industrial wax market based on Type, Application, and Region.

Industrial wax Market, By Type

• Fossil-based waxes
  • Mineral Wax
  • Paraffin Wax
  • Microcrystalline Wax
• Synthetic waxes
  • Fischer-Topsch Wax
  • Other
• Bio-based waxes

Industrial wax Market, By Application

• Candles
• Packaging
• Coatings & Polishing
• Hot Melt Adhesive
• Tire & Rubber
• Cosmetics & Personal Care
• Food
• Others

Industrial wax market, By Region

• North America
•  Europe
•  Asia Pacific
•  South America
•  Middle East & Africa

Recent Developments

• In August 2020, Sasol Ltd entered into a distribution agreement with DKSH Management Ltd (Switzerland) for marketing, distribution, and logistics for Sasol's chemicals and wax products in the European market.
• In March 2020, Calumet Specialty Products Partners acquired Paralogics, LLC (U.S), a producer of the candle and industrial wax blends, and has added 20 million pounds of annual blending and formulating capabilities.
•  In May 2019, ExxonMobil announced an expansion of three-project with a total investment of USD 2 billion to expand the US-based chemical plant at Baytown, Texas.
• In January 2019, Royal Dutch Shell announced the expansion of the fourth alpha olefins (A.O.) unit at Louisiana, the U.S., with a 425,000-tonne-per-year capacity.
• In April 2019, Sasol Ltd opened a new wax warehouse in Sasolburg, South Africa, to improve the supply chain cost base, quality of product, service experience, and to improve export business.
• In April 2019, Numaligarh Refinery launched Food Grade Wax under the trademark, Pristene. It will find applications for food packaging, pharmaceutical, and cosmetic industries.
• In February 2019, HollyFrontier  acquired Sonneborn (U.S.) for USD 655 million. The company is a producer of specialty hydrocarbon chemicals such as white oils, petrolatums, and waxes with manufacturing facilities in Pennsylvania and the Netherlands.

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