Paraffin is a soft, colorless, solid substance that is manufactured while refining crude oil to gasoline. It is made up of several saturated hydrocarbons. Paraffin can be used in several applications. Its flammable properties make it a valuable ingredient while manufacturing scented candles and other flammable wax. Paraffin is also used for its cosmetic and therapeutic properties. Paraffin wax is a natural emollient, helping make skin supple and soft. It can also help open pores and remove dead skin cells. That may help make the skin look fresher and feel smoother. Paraffin is used to help relieve pains for patients suffering from osteoarthritis, rheumatoid arthritis, fibromyalgia, and other joint mobility issues.
The most prevalent pricing scheme for suppliers of paraffin is cost-plus pricing with the cost of paraffin increasing across every step of the value chain. The price of paraffin has demonstrated erratic trends during the COVID pandemic. The average cost of paraffin has demonstrated an upward trend in the APAC region due to the limited production capacity and the increasing demand. In North America, the scenario was quite the opposite. Backed by high inventory levels, the prices of paraffin remained in a narrow stable range.
The global production for paraffin was valued at 3.7 million MT in 2020. This demand is expected to increase by a CAGR of 1.6% between 2020 to 2025. OF the 3.7 million MT produced, APAC manufacturers approximately 1.5 million MT. However, this only represents 92% to 95% of the overall demand for paraffin in APAC. To improve the production capacity to meet the demand of the market, there were planned installations in Vietnam. However, due to the COVID pandemic and the supply chain disruptions, the additional capacity could not be added in time. Moreover, a recent fire accident in an Iranian petroleum plant resulted in a supply shortage of paraffin in the market.
Paraffin has found multiple usages in a wide range of industries. It can not only be used for making candles and other goods that can be incinerated but also offers beauty and therapeutic advantages. Therefore, the application of paraffin in such diverse industries has led to R&D about paraffin. As a result of the R&D conducted, paraffin can be tweaked into N-paraffin. The per-unit cost of N-paraffin is higher than the average of paraffin. This helps drive the value-driven growth of the market.
Concerns about overusing sustainable means of energy are making consumers look for alternatives to petroleum and its by-products. With a focus on renewable means d energy, demand for petroleum is decreasing. Since paraffin is made as a by-product of crude oil refining, the raw materials required to make paraffin are also reducing. Hence manufacturing paraffin will become scarce due to the lack of raw materials in the foreseeable future.
The key manufacturers for paraffin are Sinopec, ExxonMobil, Sasol, PetroChina Company Limited, The International Group, Inc., Honeywell, Petrobras, Nippon Seiro Co., Ltd, Chennai Petroleum Corporation Limited (CPCL), Indian Oil Corp Ltd, etc. The paraffin market features a highly fragmented competitive landscape and several small players are entering the market. Grand View Research will help our client identify the best-suited suppliers by mapping their core capabilities and operational efficiency.
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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