US wax buyers say feedstock flexibility a top concern

14 August 2013 21:44  [Source: ICIS news]

HOUSTON (ICIS)--US paraffin wax buyers see feedstock flexibility as a top concern, one large volume buyer said on Wednesday.

“We see feedstock flexibility as the way to survive if Group I base oil production goes down,” the buyer said.

Wax buyers in the candle sector are looking at alternative oils such as soybean oil and palm oil and at blending these oils in new ways with the paraffin base oils, sources said.

“It depends upon cost and on what the customer preferences are,” one source added.

Group I heavy grade base oil production is the source of feedstock slackwax production for semi-refined and refined paraffinic waxes.

Group I base oil production has traditionally dominated capacity in the US and in Europe.

Now the US is emerging as a Group II base oil dominated market. This will be firmly in place by the end of the year when Chevron’s 25,000 bbl/day base oil units at its new Pascagoula, Mississippi, refinery enters start-up phase and comes on-stream with base oil output. 

“If Group I production decreases, we have to find alternatives,” a wax buyer said.

At this time in the US, no plans for Group I base oil reductions have been discussed.

Spot slackwax prices were most recently assessed at $1,306-1,424/tonne (€980-1,068/tonne) for bulk liquid material on FOB (free on board) basis US Gulf (USG).

($1 = €0.75)

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By: Judith Taylor
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