Slack Wax Market - Steady Growth Despite Numerous Challenges

Advancing at a dull CAGR of ~2% during the period of 2019-2027, the slack wax market faces several influential challenges that decelerate the pace of manufacturers’ vertical movements. While crude prices never seem to stabilize, regulations regarding the emission of sulfur during the production process pushes manufacturers to leverage technology, which instead of making a cash cow, creates a capital-intensive business. Besides budget constraints, the threat from the growing popularity of substitutes, such as synthetic and bio-based wax, are likely to divert the sales of slack wax. However, as manufacturers in the packaging industry introduce paraffin wax to ensure the flexibility of materials, players in the slack wax market can bank on manifesting a supply partnership with end-use industries.

slack wax market infographic

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Revenue Influx to Slack Wax Market Coming from Cosmetic Industry

As consumers switch to natural products to complete the quest for quality beauty products, slack wax serves as a crucial raw material for the manufacturing of cosmetics and personal care products, including baby creams, lipsticks, nail care, fragrances, suntan, sunscreen, and eye and facial makeup. Slack wax reduces the fragility of stick products by enhancing their strength and stability. Besides this, the desirable qualities of slack wax that offer protection against water loss, UV-radiation, and parasites have been gaining ground in the industry for the formulation of cleansers, conditioners, emulsifiers, and solubilizing agents.

It is worth noting that, the demand for cosmetic and personal care products is increasing in parallel to the growing consciousness about their personality among consumers, which will further strengthen demand with their proliferating financial lucidity. Given the promising influx of revenue coming in from the cosmetics industry, the attractiveness of the slack wax market will be high in regions that witness massive demand for personal care products.

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Asia Pacific is one of the leading producers and consumers of personal care products, with China accounting for significant sales of facial and hair care products. Besides this, given the influence of social media and Western culture, men are evincing a marked interest in using grooming products in this region, which will engender the popularity of men-centric personal care products. To add to that, the presence of the food and beverage industry, coupled with the penetration of e-Commerce channels has added a new dimension to the packaging industry, which could drive investments in the slack wax market.

Slack Wax Market - Analyzing the Competition

While the development of innovative products to differentiate product portfolios remains a winning imperative for manufacturers operating in the slack wax market, targeting a cost-sensitive new market by strategic product placement could, in turn, help brands stand out in the moderately consolidated landscape.

Since effects of stalled export activities, on account of the production of group I base oil, have been holding back the true sales potential of slack wax, manufacturers are poised to offset this challenge through technological means by bringing in innovations in de-waxing and de-oiling processes, to optimize the production of paraffin wax from slack wax. For instance, in February 2019, Poland-based Polwax SA leveraged ThyssenKrupp’s UHDE technology for the development of a de-oiling unit, to produce 30,000 tons of slack wax per year.

slack wax market segmentation

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Analysts’ Perspective on the Future of the Slack Wax Market

Analyzing a cohort of dynamics, analysts of the TMR study infer that, the slack wax market will witness a volume sales of ~4 thousand kilo tons in 2019, and is likely to register an unimpressive volume CAGR of 1.4% during 2019-2027. Though the landscape is weighed down by stringent regulations, an investment made by end users towards the development of paraffin wax from slack wax will ensure steady growth during the forecast period.

Market players can prioritize investments towards the development of slack wax from light grade, as increasing focus of enhancing the ambiance of homes with the help of fragrance wax and scented candles is likely to complement market growth. However, for general slack wax applications, the heavy grade can be deemed suitable, on account of its low oil content.

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Rise in Demand for Slack Wax due to Stringent Government Regulations on Sulfur Emissions

  • Slack wax, a petroleum product, is used as a key raw material in the production of paraffin wax. It is derived from lubricating oils, which possess high oil content. Group I base oils are a major source of slack wax, and are produced by solvent refining, which is a simple and low-cost refining process.
  • Properties associated with slack wax such as low melting point, high flash point, and non-staining are expected to boost the demand for slack wax in various industrial applications.
  • The base oil industry has been experiencing fundamental changes since the last few years, owing to stringent government regulations. This has led to a decline in the demand for group I oils, and rapid increase in the production of group II, III and IV base oils. Consistent decrease in the production capacity of group I oils is estimated to adversely impact the slack wax market during the forecast period. Slack wax is still used in the industry due to the dearth of direct substitutes. Other internal substitutes such as synthetic and bio-based wax are in the initial stages of development. This is a major factor expected to drive the slack wax market in the near future. 

Global Slack Wax Market: Highlights

  • In terms of value, the global slack wax market is anticipated to expand at a CAGR of ~2% during the forecast period, to reach ~US$ 4.3 Bn by 2027.
  • Based on grade, the light segment held a major share of the global slack wax market in terms of value in 2018. Light grade slack wax is soft and adheres well to the sides of containers. Therefore, it is ideal for containers and tea light candles. Increase in the consumption of consumer goods such as matchstick boxes and scented candles is a key factor anticipated to boost the demand for light grade slack wax in the near future.
  • Several slack wax producers are concentrated in Asia Pacific. Increase in the requirement of paraffin wax, especially in countries such as China, India, Indonesia, and Thailand, is a prominent factor projected to propel the slack wax market in the region.
  • Fluctuation in crude oil prices, decline in the production capacity of group I base oil due to stringent government regulations on sulfur emissions, and increase in focus on natural wax and synthetic paraffin wax are likely to restrain the global slack wax market. 

Demand for Slack Wax to Increase in Paraffin Wax Application

  • Based on application, the paraffin wax segment dominated the global slack wax market in 2018. The segment is expected to maintain its dominance in the slack wax market during the forecast period.
  • Slack wax is a key raw material used in the production of paraffin wax by utilizing solvent de-oiling and hydro-finishing. Paraffin wax is extensively employed in the manufacture of various products such as candles, wax papers, polishes, cosmetics, and electrical insulators. This is anticipated to propel the slack wax market in the near future.

Asia Pacific a Rapidly Growing Slack Wax Market

  • In terms of volume and value, Asia Pacific constituted a prominent share of the global slack wax market in 2018. It is estimated to maintain its dominance between 2019 and 2027.
  • Rise in the demand for paraffin wax in applications such as construction boards, matchstick boxes, candles, and rust protective products is augmenting the slack wax market, as slack wax is primarily used in the production of paraffin wax.
  • Increase in the usage of industrial products such as scented candles, construction boards, matchstick boxes, rust protective products, moisture vapor barriers, polishes, inks, and carbon paper is projected to drive the demand for paraffin wax, thereby propelling the slack wax market in Asia Pacific.
  • China is a major producer and consumer of slack wax in the region. The presence of major paraffin wax producers in the country and increase in the demand for candles are key factors anticipated to drive the slack wax market in the country.
  • Asia Pacific is estimated to exhibit a significant growth rate for the global slack wax market as compared to other regions. North America and Europe are projected to exhibit moderate growth rates in the global slack wax market during the forecast period. 

Global Slack Wax Market: Competition Landscape

  • The report comprises detailed profiles of the major players operating in the global slack wax market, along with company market share analysis and competition matrix of major players for 2018. The report also consists of market footprint analysis by grade and application of the players.
  • Prominent players operating in the global slack wax market are
    • Exxon Mobil Corporation
    • Royal Dutch Shell plc.
    • Sasol Limited
    • RAHA Paraffin Company
    • American Refining Group, Inc.
  • The global slack wax market is consolidated among key market players. The top three players account for more than 50% share of the global slack wax market.

Slack Wax Market: Scope of the Study

A new study on the global slack wax market was published by Transparency Market Research (TMR). It presents a wealth of information on key market dynamics, including the drivers, market trends, and challenges, as well as the structure of the slack wax market. TMR’s study offers valuable information about the slack wax market to illustrate how growth will discern during the forecast period of 2019–2027.

Key indicators of market growth, which include value chain as well as supply chain analysis, and Compound Annual Growth Rate (CAGR), are elucidated in TMR’s study in a comprehensive manner. This data can help readers interpret the quantitative growth aspects of the slack wax market for the duration of the forecast period.

An extensive analysis of leading market players’ business strategies is also featured in TMR’s study on the slack wax market. This can help readers understand the principal factors to foresee growth in the slack wax market space. In this study, readers can also find specific data on the qualitative and quantitative growth avenues for the slack wax market, which will guide market players in making apt business decisions in the future.

Key Questions Answered in TMR’s Slack Wax Market Study

  • What is the scope of growth of slack wax companies in the agricultural sector?
  • What will be the Y-o-Y growth of the slack wax market between the years 2019 and 2027?
  • What is the influence of the changing trends in technologies on the slack wax market?
  • Will Asia Pacific continue to remain the most profitable regional market for slack wax providers?
  • Which factors will impede the growth of the slack wax market during the forecast period?
  • Which are the leading companies in the global slack wax market?

Slack Wax Market: Research Methodology

A unique research methodology is utilized by TMR to conduct comprehensive research on the growth of the slack wax market, and arrive at various conclusions on the future growth prospects of the market. This research methodology is a combination of primary and secondary research, which helps analysts warrant the accuracy and reliability of the drawn conclusions.

Secondary resources referred to by analysts during the production of the slack wax market report include statistics from company annual reports, SEC filings, company websites, World Bank database, investor presentations, regulatory databases, government publications, and industry white papers. Analysts have also interviewed senior managers, product portfolio managers, CEOs, VPs, and market intelligence managers, all of whom contributed to the production of TMR’s study on the slack wax market, as a primary resource.

These primary and secondary resources provided exclusive information during the interviews, which serves as validation from slack wax industry leaders. Access to an extensive internal repository and external proprietary databases allows for this report to address specific details and questions about the slack wax market with accuracy. The study also uses the top-down approach to assess the numbers for each segment and the bottom-up approach to counter-validate them. This has helped in making TMR’s estimates on the future prospects of the slack wax market more reliable and accurate.

Segmentation of the Slack Wax Market

TMR’s study on the slack wax market includes information segregated into three sections: by grade, by application, and by region. Changing industry trends and other crucial market dynamics that are associated with these sections of the slack wax market have been discussed in detail.

Grade

Light

Heavy

Application

Paraffin Wax

Construction Boards

Candle Manufacturing

Others (including Polishing Boards, Cable Filling, Rust Protective Products, and Matchstick Boxes)

Region

North America

Europe

Asia Pacific

Latin America

Middle East & Africa