India paraffin wax import demand to weaken further

SINGAPORE (ICIS)–India’s demand for imported paraffin wax will continue to weaken as competitively priced material is available in the domestic market, industry sources said on Friday.

Domestic p-wax prices were at Indian rupee (Rs) 57-58/kg for February, down by Rs3-4/kg from January; with import parity at less than $1,000/tonne CFR (cost and freight) India, market players said.

Import offers from China were at least $1,100/tonne CFR (cost and freight) India.

China is a key producer of paraffin wax in Asia, with cargoes mostly exported to southeast Asia and India.

On 8 February, spot prices of 58/60C fully refined slab paraffin wax were assessed at $1,050-1,100/tonne CFR (cost and freight) India, according to ICIS data.

“I foresee that people will stop importing [paraffin wax] at this rate. Domestic prices are so cheap now, they [the local producers] are even lowering prices to compete with each other,” an Indian trader said.

But China’s offers may continue to increase on the back of good domestic demand and tight supply after the Lunar New Year holiday, market sources said. China was on holiday for a full week from 27 January to 2 February.

“I am not considering [Chinese] imports now, local material is much cheaper than imports and the quality is equivalent,” said an end-user in India.

Chinese material faces stiff competition in the Indian market from 60/62C fully refined paraffin wax from Egypt and semi-refined paraffin wax from Iran, along with alternatives such as palm wax and synthetic wax.

“There seems to be no demand from India at all, especially after the cash crunch last year,” said a Chinese trader of fully refined wax.

Most Chinese exporters noted a consistent decline in buying enquiries from India over the past year, saying that buyers prefer procuring directly from the domestic market.

India’s demonetization policy introduced last November further crippled buying interests, market sources said.

“India market is not active anymore. We used to have lots of enquiries, and now I only have one enquiry since January [this year],” an Iranian exporter of semi-refined paraffin wax said.

Market players are hoping that some buying momentum in the country would pick up from June, as end-users prepare months ahead for the Diwali festival or Festival of Lights celebrated in October.

Paraffin wax is commonly used in candles, coatings and laminates for food packaging.

India has three main paraffin wax producers that cater to the domestic market, namely Chennai Petroleum Corporation Limited (CPCL), Numaligarh Refinery Limited, and Indian Oil Corp Ltd (IOCL). 

Focus article by Jeslyn Lerh

Top photo: Paraffin wax is used in candles. (Photographer: Kristy-Anne Glubish/Design Pics Inc/REX/Shutterstock)