04 September 2008 19:42 [Source: ICIS news]
HOUSTON (ICIS news)-- US paraffinic wax (p-wax) prices have soared by 86% from last year, and continued tight supply is expected to keep prices firm just as the peak candle-making season begins, market participants said on Thursday.
Rising production and transportation costs following the run-up in crude oil eroded producer margins, prompting a series of price hikes beginning in February, sources said.
Buyers have received up to two price increases each month since February.
The spot price for fully refined p-wax with melt point 125 to 140° F (52-60° C) has increased by 86% since last year to $1,945-2,039/tonne (€1,342-1,407/tonne), according to global chemical market intelligence service ICIS pricing.
In recent weeks crude oil prices have fallen by more than 25% since peaking at $147.27/bbl on 11 July. However, crude prices are still considerably higher than the average $72/bbl recorded last year, producers noted.
Despite the continued decline in energy costs, market players said that the lack of availability was keeping wax prices firm and prices had likely not peaked yet.
Wax supplies have been stretched since suppliers Citgo and Marathon announced they would exit the business, taking 20% of wax supply out of the
“The industry has yet to see the full impact of these closures, which takes around 600m lb of wax out of the market,” a wax supplier said.
Meanwhile, demand is expected to surge further as the prime candle-making season kicks in, the supplier added.
Candle makers in the
Common uses for paraffin wax include candles, corrugated boxes, waxed papers, frozen food cartons and wrappers.
($1 = €0.69)
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