Global Wax Industry 2010: Market Analysis and Opportunities

A comprehensive analysis that highlights global supply and demand of waxes

including animal-based, vegetable-based, mineral, and such synthetic waxes as

Fischer-Tropsch (F-T), alpha-olefin (A-O), and polyethylene (PE) waxes. This study

will address "neat" GTL waxes, blended with petroleum waxes to increase global

wax volumes.

The study will be truly global in scope since the wax industry is a global one

defined by worldwide end-use markets and supply options.

The study will assess global wax supply, demand, market space, pricing

developments, inter-material competition, manufacturing economics, trends,

and market developments

– The study will also focus on the impact of the global recession and whatit will mean to the demand for waxes

The study will focus on conventional and synthetic wax providers

Provide wax manufacturing cost models and comparisons based on type of

wax

Analyze barriers to entry for neat and co-processed GTL waxes and other

synthetic, animal-based, and vegetable-based waxes

Analyze alternate business models which would allow current Group I plants,

which are the source of most of wax consumed, to continue operating.

Competitive supplier profiles will be provided for 20 entities including major

global wax manufacturers and marketers.

Regional Coverage

Asia-Pacific

North America

Latin America

Eastern Europe

Western Europe

Africa and the Middle East

Global Wax Industry 2010:Market Analysis and Opportunities

2nd Edition of the Global Series

Published December 2010Base Year: 2010

Energy

In-Depth Report Series

Report #Y635A | © 2011 Kline & Company, Inc.

www.KlineGroup.com


Report #Y635A | © 2011 Kline & Company, Inc.www.KlineGroup.com

Report Scope

Global demand for waxes reached an estimated 9,590 million lbs

in 2010. Mineral waxes (including petroleum) account for an

estimated 85% of this global demand, with synthetic waxes

accounting for 11%, and animal and vegetable waxes, accounting

for 4%, as shown in Figure 1.

As petroleum waxes account for a significant portion of the wax

supply, this study's primary focus will be petroleum wax supply.

Although, for many years, petroleum wax was considered a by-

product of lubricant basestock production, it has come onto its

own over the last decade and is considered by most refiners to

be a relatively high-margin product and is often an important

contributor to the overall profitability of the refinery.

However, the fate of petroleum wax supplies is largely outside the control of the wax industry. Wax supplies are tied

to regional basestock quality requirements and this is independent of wax supply and demand.

The two major variables for the future petroleum-derived wax supplies are:

The rate of global basestock quality increases and the resultant shutdown of wax-producing Group I lubricantbasestock plants. This is the rate setting decline mechanism for petroleum wax supplies.

Economic expansion in China, which in turn sets the rate of lubricant basestock and wax plant expansions.China's Group I lubricant basestock and wax plant expansions will not significantly exceed this regionsrequirements for lubricant basestock self-sufficiency, since other regions are turning to Group II and Group III.

Until now, decline in supplies from North America and Western Europe have been compensated by growth in

supplies from China. However, this may not be the case in the future as Chinese lubricant industry starts demanding

Group II and III basestocks leading to a flat or declining Group I supply with similar effects on wax supplies.

On the demand side of the equation, waxes are used in thousands of applications around the world, with candles

being the predominant application on a global basis. As shown in Figure 2, candles are estimated to account for 43%

of the waxes consumed.

Figure 1: Estimated Global Demand for Waxes by Type, 2010

Mineral wax-a, 85%

Synthetic waxes-b,c, 11%

Animal andvegetable

waxes-d, 4%

Total: 9,590 Million lb

a- Petroleum waxes account for 98% of this demand.b- GTL waxes account for 48% of this total. c- Synthetic waxes include ethylene telomeres and polyethylene waxes,

in addition to GTL waxes.d- Animal and vegetable waxes typically include beeswax, spermaceti, tallow,

candelilla, carnuba, and jojoba waxes.

Figure 2: Estimated Global Demand for Waxes by Application, 2010

Candles, 43%

Total: 9,590 Million lb

Rheology/surface

applications, 14%

Board sizing, 15%

Health industries, 3%

Other, 16%

Packaging, 10%


Wax consumption is expected to grow at an average annual growth rate of more than 2% from 2010 to 2020.

Clearly, different regions and different product applications will enjoy different growth rates. Ultimately, insufficient

supply growth or even a supply decline will constrain demand growth.

Hence, several wax alternatives are studied in the report besides petroleum waxes including GTL waxes, animal

waxes, mineral (montan) waxes, and vegetable waxes to see if a combination of these could sort the impending

under supply problem.

Key Benefits

Subscription to this report helps you grow your business, improve your market share, and make you more

competitive in the market place. Subscription to this report helps understand drivers behind petroleum wax

supplies and the opportunities and threats represented by this industry aspect to your business.

The big questions tackled in great detail in this study include:

What is the supply of and demand for different types of waxes?

What is the impact of the global recession on the demand for waxes?

Could GTL waxes, among others compete in such high-volume wax markets as candles, packaging, board sizing,and others?

What are the manufacturing costs for each type of wax?

What will be the global market impact and business dynamics of flat or declining supplies of petroleum wax?

What are the business options available to de-oilers, petrolatum upgraders, and specialty waxformulators/blenders who will be affected by the decline in petroleum wax supplies?

What kind of market space and pricing structures will be prevalent?

What might be some of the key barriers to entry?

What might some of the key business opportunities and threats be for industry participants?

Global Wax Industry 2010: Market Analysis and Opportunities presents subscribers with Kline's objective 20/20

vision and solidly backed answers to these questions about GTL, vegetable and animal waxes, other synthetic

waxes, and their impact on the global wax market.




1. INTRODUCTION

2. EXECUTIVE SUMMARY

3. WAX TYPES, PROPERTIES, AND

GRADES

A. Overview

B. Wax type by source

C. Wax properties and grades

D. Mineral wax properties and grades

E. Synthetic wax properties and

grades

F. Vegetable wax properties and

grades

G. Animal wax properties and grades

4. APPLICATIONS AND MARKET SEGMEN-

TATION

A. Summary and applications by

source of wax

B. Candles

C. Board sizing

D. Health industries

E. Rheology and surface applications

F. Other non-packaging applications

G. Packaging applications

5. WAX MANUFACTURING PROCESSES

AND ECONOMICS

A. Overview

B. Manufacturing cost assumption and

basis

C. Petroleum wax

D. Hydrogenated vegetable wax

E. Fischer-Tropsch wax

F. Polyethylene wax

G. Summary

6. CURRENT AND FORECAST GLOBAL

SUPPLY

A. Global overview - historical and

current

B. North America

C. Latin America

D. Western Europe

E. Eastern Europe

F. Asia

G. Africa and the Middle East

H. Wax supply forecast

7. CURRENT AND FORECAST GLOBAL

DEMAND

A. Global overview

B. North America

C. Latin America

D. Western Europe

E. Eastern Europe

F. Asia

G. Africa and the Middle East

H. Wax demand forecast

8. SUPPLY/DEMAND ANALYSIS

A. Current supply-demand balance

B. Supply-demand balance for 2015

C. Supply-demand balance for 2020

9. GLOBAL WAX TRADE ANALYSIS

A. Low and high oil content petroleum

waxes

B. Synthetic waxes

C. Animal and vegetable waxes

10. PRICING ANALYSIS

A. Historical pricing dynamic

B. Current pricing

C. Price/market relationship

D. Pricing by applications

E. Price outlook

11. BARRIERS TO MARKET ENTRY

A. Supply reliability

B. Quality assurance

C. Long term commitment

D. Price

E. Logistics

F. Environmental and regulatory

issues

G. Capital intensity

H. Product development support

12. BUSINESS DYNAMICS AND STRATE-

GIES

A. Non-petroleum wax suppliers

B. Petroleum wax suppliers

C. Wax buyers

13. WAX MANUFACTURER PROFILES

Report Contents

Table 1

List of Suppliers Profiled

Alborz

BASF

Calumet

Clariant

CNPC/SINOPEC

ExxonMobil

H&R Wax Company

Iberceras SA

IGI

Kuwait Petroleum

Naftowax

National Oil Company of Iran

Nippon Seiro

Paramelt BV

PDVSA

Petrobras

Sasol

Shell

Sonneborn

Other suppliers



Methodology

Kline is unmatched in our ability to gather hard-to-get market and competitive intelligence with a high degree of

confidence. Kline's market analysis approach places the principal emphasis on primary research techniques to

ensure that the foundation of business intelligence and insight is accurate, current, and reliable.

During the course of field research, Kline's professional staff of industry experts will conduct in-depth discussions

and personal interviews with a wide range of knowledgeable industry participants and opinion leaders, including

telephone interviews and personal visits with wax producers, end users, technology and catalyst companies, natural

gas producers, government agencies, trade associations, and other industry experts.

This approach has proven to be the most effective and reliable approach to obtaining accurate market data,

capturing expert insights, and identifying business opportunities. Primary research comprises 85% of the overall

research methodology for this report.

In addition, this analysis is supplemented by secondary research drawn from the review of suppliers' product

literature and price lists; a search of recent trade and technical literature; Internet sources; and analysis of

statistical data from government, industry, and trade associations and agencies.

Kline Credentials

Kline is a worldwide consulting and research firm dedicated to

providing the kind of insight and knowledge that helps companies

find a clear path to success. The firm has served the

management consulting and market research needs of organi-

zations in the chemicals, materials, energy, life sciences, and

consumer products industries for over 50 years.

Kline's research and consulting services extend across the entire

energy industry value chain. Our solutions have helped clients

develop better ways to create and profit from new business

opportunities, respond to competitive and economic threats,

improve productivity, achieve sustainable growth, and optimize

performance. Kline provides clients with facts, forecasts, and

recommendations based solidly on the realities of the market.

Our market research reports and services are designed to

provide subscribers with a deeper understanding of their

markets, an outlook for their business, and accurate information

about their competitors. Our clients tell us they often use Kline's market research to validate their own internal

analysis, and many clients rely on Kline reports as their most critical source of information.

For more information about this study or Kline's other services, e-mail us at [email protected], visit our website

at www.KlineGroup.com, or contact us at any of our regional offices listed below.

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Global Wax Industry 2010: Market Analysis and Opportunities