Mexico candle season to be cut short - producer

26 June 2008 22:35  [Source: ICIS news]

GUANACASTE, Costa Rica (ICIS news)--The peak candle-making season in Mexico may be cut short due to exceptional tightness in paraffin wax supply, a candle maker said on Thursday.

Candle makers in Mexico rev up production in August for the busy “Day of the Dead” holiday in November, and then Christmas holidays in December, a candle manufacturer based in Mexico said on the sidelines of the Latin American Candle Manufacturers Conference in Guanacaste.

“So far supply has been okay, not great, but our orders have been met,” the buyer said. “But its only June and we need the most wax during the second half of the year. We are hunting for product to get us through and not having success.”

Global paraffin wax supply has tightened to unprecedented levels in 2008 following the exit of US wax producers Marathon and Citgo. The candle sector accounts for more than 60% of paraffin wax demand, a US supplier said.

“We have received numerous enquiries from buyers all over the world who are on the lookout for alternative sources of product, following the closure announcements,” a US wax supplier said.

However, the seller added that the market was tight and there was limited material available for spot transactions, once contractual obligations were met.

The lack of paraffin wax availability will result in cutbacks in candle production, the candle maker said. “We’ll have no choice but to cut production to minimum levels if we can’t secure enough raw material supply.”

Aside from a tightening market scenario, consumers were dealing with increasing wax values. Fully refined paraffin wax spot prices have soared 70% to just over $1,700/tonne (€1,088/tonne), from $1,000/tonne one year ago, according to global chemical market intelligence service ICIS pricing.

($1 = €0.64)

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By: Heather McGuire Doyle
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