Industrial Wax Market size is forecast to reach $12 billion by 2025, after growing at a CAGR of 4.5% during 2020-2025. The primary factors driving market growth are growing industrial wax applications and increasing demand for candle application. Some of the other factors that drive global demand for industrial wax are rising population growth and increasing food and pharmaceutical consumption. Increased consumption of home decor items such as scented candles, automobile, electronics, cosmetics and personal care products due to increased disposable income is expected to generate a huge market for industrial wax.
Industrial Wax Market Segment Analysis - By Type
The fossil-based waxes segment held the largest share in the industrial wax market in 2019. These waxes are commonly used in the manufacture of candles, packaging and coatings for commercial goods. In addition, these waxes are used in the cosmetics industry as they are commonly considered healthy and are extracted from different crude oil refining processes. Petroleum wax has a high-gloss characteristic which makes it suitable for polishing and is commonly used in floors, furniture, cars and footwear. Mineral waxes are derived by the fractional distillation process from coal, petroleum, lignite, and shale oil. Few widely known mineral waxes include microcrystalline, paraffin, petrolatum, and ceresin. Microcrystalline waxes give a high variety of physical and thermal properties. Due to these features, these products are commonly used in various applications, such as adhesives, chewing gums, cosmetics and cheese formulations.
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Industrial Wax Market Segment Analysis - By Application
The tire & rubber application held the largest share in the industrial wax market in 2019 and is growing at a CAGR of 4.8% during the forecast period. Industrial waxes are applied to the rubber and tires compounds to shield them from ozone and UV lights. In addition, to prevent them from cracking, these waxes are added to tires and rubbers. In addition, during the forecast era, the rising tires and rubber industries are expected to drive the market for industrial waxes. The candles application is also growing at a faster rate during the forecast period, owning the availability of a wide range of different shapes and sizes of candles and increasing demand for them. The growing number of distribution networks, such as home decor & mass merchandise stores and e-commerce sites, have helped to raise the overall demand for candles. Therefore, the global industrial wax will witness a substantial growth during the forecast period.
Industrial Wax Market Segment Analysis - Geography
Asia Pacific held the largest share in the industrial wax market in 2019 up to 30%. Among the leading markets for candle manufacturing, packaging, coatings & polishes, and tyres & rubber are China, India and Japan. Development in the application segments has increased the region's demand for industrial wax. Over the past few years, Asia-Pacific demand has reached greater levels and has become a major hub for the export of cosmetics and personal care products. It is expected that tier-2 markets, such as South Korea, will see a rapid increase in demand for personal care products. In addition, China and India are also expected to experience strong opportunities in the market for personal care. In addition, in terms of both production and consumption, China stands to be the largest adhesive market in the region. Adhesive use has increased in industries such as furniture, building, and so on. Thus, further driving the growth of the wax market in the region.
Industrial Wax Market Drivers
Growing cosmetics industry
The personal care and cosmetic sector are booming in varied regions due to the increasing demand of cosmetics from the consumers. According to International Trade Administration (ITA), the total cosmetic production of France increased from 22,236 in 2018 to 22,680 in 2019. Also, South Korea is the 8th largest cosmetics market in the world, representing nearly 3.0% of the global market. In 2017, the South Korean’s market size was approximately $8.8 billion, the total local production increased by 3.6% from the previous year and the market is growing by an annual growth rate of 4.7% for the last 5 years (2013-2017). The United States cosmetic imports accounted for 24.7% of the total import market share at $291 million. Industrial wax is widely used in cosmetics and personal care industries for hair care, skincare, makeup, and other allied products. Thus, growing cosmetic industry is expected to drive the demand for industrial waxes.
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Industrial Wax Market Challenges
Shrinking supply of paraffin wax
Changes in the production process of base oil have been observed in the past few years. Base oil manufacturers are changing their focus from waxes to a more profitable choice for base oil. Via isomerization, waxes are converted in this process into base oils. As a consequence, it was seen that the stock of fossil-based paraffin waxes is decreasing. As the supply of fossil waxes continues to shrink, the supply-demand gap is expected to result and is expected to be the limiting factor for the industrial wax market. New wax processing technologies such as GTL and CTL are able to produce good quality wax and are expected to fill the demand-supply gap during the forecast period.
Market Landscape
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Industrial Wax Market. In 2019, the market of Industrial Wax Market has been consolidated by the top five players accounting for xx% of the share. Major players in the Industrial Wax market includes Sinopec Corp, China National Petroleum Corporation (CNPC), HollyFrontier Corp., BP PLC, Nippon Seiro Co., Ltd., Baker Hughes, Exxon Mobil Corp, Sasol Ltd., among others
Key Takeaways
Asia Pacific dominates the market, owing to the rise in construction activities across the globe, driving the demand for adhesives, which is one of the leading applications for waxes. In addition, technological developments have stimulated the demand for adhesives in the region. This in turn, is projected to have a significant impact on market growth over the forecast period.
High wax consumption is expected to increase market growth over the forecast period due to its advantages, including UV resistance, anti-caking properties, excellent insulation, and resistance to microorganisms, moisture and odor. The development of the polymer manufacturing, pharmaceutical, food and personal care industries is also boosting demand for wax globally.
In addition, wax-coated paper provides professional and cost-effective packaging options to protect items from moisture, moisture, and greasing. Some of the sectors, such as cosmetics, are now entering into alliances with other industry leaders. Such strategic partnerships, such as bio-based wax, synthetic wax, and petroleum wax, are likely to generate a huge market for wax.
However, operations in various industries such as cosmetics, adhesives and so on is being significantly affected due to the COVID-19 epidemic, as most of countries have issued “stay at home guidance” i.e., lockdown. And it is expected that the outbreak of COVID-19 will be seen in the whole year of 2020, and a few months in 2021. This is limiting Industrial Wax market growth.
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