Asian Paraffin Wax Market Falls Amid Low Demand, Suppliers Indicate Slashing Prices for June 2023

The Paraffin Wax market in Asia experienced significant declines this week as a result of reduced demand from downstream industries, an increase in supply, and lower production costs. Manufacturers of Paraffin Wax have been forced to cut production due to the surplus supply and outdated inventory. Chinese suppliers are offering large quantities of Paraffin Wax at flexible prices as trading activity across the Asian market has recorded a dip throughout May 2023.

By the end of the week on June 2, 2023, the price of Paraffin Wax in China experienced a decline to USD 1230 per ton FOB Qingdao. Due to economic downturn concerns, providers are cautious about decreasing prices in both local and international markets. The sluggish demand from the cosmetics and candle-making industries significantly reduced trading activities in the region. Furthermore, the abundance of supplies of Paraffin Wax resulted in a cut in the export offers from China to India and Southeast Asian markets, which has led to a bearish price trend. In terms of the upstream market, Crude Oil prices remained low as purchasing activities in China declined this week. The drop in oil prices was driven by the release of Chinese data indicating a larger contraction in manufacturing activity than expected in May. Weakening demand was identified as the primary factor influencing the downward trend in Paraffin Wax prices.

The cosmetics and household segments in the Asian market continue to be impacted by weak purchasing and limited supplier demand. The demand for Paraffin Wax has not experienced a significant recovery, making it challenging for sellers to reverse the prolonged downward price trend. Additionally, the freight market remains sluggish, as evidenced by a 3% decline in the Global Container Index for the week ending on May 26.

According to ChemAnalyst, the Paraffin Wax market is anticipated to follow a bearish trend due to cautious operations in downstream industries and anticipated volatility of upstream Crude oil prices. Weak demand and declining purchasing activities will compel suppliers to maintain lower prices. The market is expected to be influenced by ample availability, which will dampen buyer sentiment, leading to a reluctance to make future cargo purchases. In terms of the freight market, temporary stability in rates may be achieved due to capacity reductions caused by low container requirements. However, if demand surpasses supply, it could contribute to further rate hikes.