Paraffin Wax prices edge higher in the US in effect of squeezed supplies from China ahead of Winter Olympics

In the US, Paraffin Wax prices have attained tremendous gains due to robust demand and constraint supplies from China. Many factories in China have been suspended for the upcoming Beijing Winter Olympics which is impacting the overall production rates and product supplies. Moreover, the Lunar year holidays may spiral the supply chain from bad to worse in Q1 as retail sales are expected to be sluggish in China for a while. Hence, firm demand from the downstream cosmetics and candles manufacturers and limited availability of the material in the US market have kept the pricing trend of paraffin Wax in an upward trajectory.

US buyers are already struggling with imports from China due to extended delivery times now more disruptions in the supply chain would be faced ahead of the winter Olympics and Lunar Year holidays which is going to fuel the values of imported commodities including Paraffin Wax in the US market. Additionally, with the increasing number of Omicron cases in China, narrow lockdowns have been imposed by four major ports such as Shanghai, Tianjin, Dalian, And Shenzhen following the zero-tolerance coronavirus policy to control the spread of Coronavirus highly transmitted variant.

If these lockdowns would extend and become more widespread in China, supply chain woes could exacerbate, and the effects will be evidently seen in the US market. Moreover, soaring prices of upstream Crude Oil and rising freight charges in the first month of the year are again exerting pressure on Paraffin Wax fundamentals.

China is the major exporter of Paraffin Wax globally and the US imports more than 35% of its total imported Paraffin Wax from China. Thus, any disturbance in production rates or supply chains in China is going to directly affect the Paraffin Wax market in the US.

According To ChemAnalyst, Paraffin Wax prices are likely to climb steeply in the near term in the US market owing to the slower imports from China due to the Lunar New year and Winter Olympics shutdowns domestically. Moreover, expected coronavirus restrictions on ports or factories followed by lockdowns in China could worsen the supply chain bottlenecks that will directly impact the pricing trend of Paraffin Wax in the US.