04 June 2008 05:53 [Source: ICIS news]
SINGAPORE (ICIS news)--Record feedstock costs and tight supply had propelled Asia’s paraffin wax (p-wax) spot prices to new highs, with parcels selling at about 60% more than transactions at this time last year, market players said on Wednesday.
Spot prices for p-wax had remained firm for almost 4 years since Jan 2004 as the battle waged on between high feedstock costs and strong downstream demand.
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“The second quarter is usually a low-demand season and spot prices for paraffin wax often decrease during these months”, a China-based trader commented. However, this year it was not the case, he added.
“With crude above $120/bbl, operating margins are down, so producers cannot afford to discount prices”, another China-based seller remarked.
“Moreover, market sources reported that deals in P-wax were usually done on an immediate cash basis in
A market source said it was currently considering other substitutions if P-wax prices were to remain this high. He appended that substitutions might consist of using semi-refined p-wax or part substitution with triple pressed stearic acid which was more stable in pricing.
P-wax producers include PetroChina, Masterank, and Pertamina. P-wax is used in the production of candles, in the food packaging and petroleum jelly industries.
($1 = €0.65)
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