Players are hoping for demand to return in July or August ahead of the Christmas candle manufacturing season
China’s export prices of 58/60C paraffin wax were slashed by $50/tonne over two weeks in June amid weak market demand and rising inventories at the Chinese refineries, according to industry sources on 19 June.
Prices of 58/60C fully-refined solid paraffin wax were at $1,320-1,360/tonne FOB (free on board) China for the week ended 18 June, according to ICIS data.
Trading momentum for the China paraffin wax export market has not improved for several months after export demand waned following pre-Easter holiday purchases in early March.
However, prices were largely underpinned by long turnarounds at two major Chinese refineries producing export grade wax – Shanghai Gaoqiao Petrochemical and Dalian Petrochemical – which spanned from April to June.
Supply has since been lengthened, with both refineries on production after the restart in early June, according to market participants.
“I don’t want to buy at the moment – prices are dropping and end-users are not buying,” said a Chinese trader.
As it is difficult to offload materials because of poor demand, most suppliers are concentrating on reducing stockpiles rather than making purchases.
In addition, prices were falling too quickly within a short time span and they did not want to incur risks buying at comparatively higher prices should the market continue to soften.
Domestic demand in China has also weakened during this seasonal lull, putting downward pressure on prices.
In northeast China, domestic prices for fully-refined solid wax were stable-to-soft at yuan (CNY) 8,200-8,550/tonne EXW (ex-works) for the week ended 18 June.
Market participants are hoping for demand to return in July or August when candle producers start to buy raw materials for the Christmas candle manufacturing season.