CLEVELAND – According to a new study from The Freedonia Group Inc., demand for waxes in the United States is forecast to grow 2.2 percent per year to $2.5 billion in 2013, aided by an eventual recovery in the manufacturing and construction sectors of the economy. Market value growth will decelerate sharply due to an expected moderation in petroleum wax price increases after significant spikes in the 2003 to 2008 period.
Petroleum waxes dominate the U.S. wax market, with over half of market value and nearly 70 percent of product volume in 2008. However, significant changes are occurring in this market, due primarily to changes in the petroleum refining sector (which is reducing supply) and competition from alternative materials, including other waxes and non-wax products such as plastics.
Demand for synthetic waxes will surpass the $1 billion mark by 2013 and provide the best growth opportunities in the wax industry. One of the major advantages of synthetic waxes is that they can be manufactured in a broad spectrum of grades with properties tailored to specific applications. Synthetic waxes are also valued for their relatively high melt point, heat resistance and fast set time.
Natural waxes will continue to account for less than 10 percent of the wax market with sales reaching $190 million by 2013. Good opportunities exist for growth, primarily in soy waxes but also in a variety of waxes used in blends with lower-cost synthetic or petroleum products. Demand for natural waxes will also benefit from the current strong consumer interest in all-natural products. Nevertheless, limited supply and higher prices than competitive products will curb overall gains.
U.S. Demand for Waxes to Reach $2.5 Billion in 2013
July 1, 2009