The original raw material for paraffin wax as a demand-supply regulator
The raw material from which paraffin wax is made is the classic crude oil. Crude oil belongs to the classic raw materials. As a raw material that is traded on the financial markets, crude oil is subject to certain, sometimes severe, price and demand fluctuations. Commodities traded on financial markets also include agricultural products, other oils, metals, energies and minerals.
Commodities are an essential component of many different goods and form the basis for the industrial production of a wide variety of products. The production of raw materials and their consumption depend on various factors, including climate, the season, natural resources and artificial resources. Furthermore, demand is also determined by the complex relationship between the economy and consumers.
Current paraffin wax market situation
Economic factors and consumer habits also influence commodity prices in times of crisis. At the moment this can be observed very well in the paraffin wax sector. Due to the sharp drop in the price of crude oil, some paraffin waxes have become significantly cheaper. This indicates a buyer's market in the short term - however, only a few buyers are currently announcing demand in the paraffin sector. This is logically due to the corona crisis, as many sales outlets have been closed due to the crisis and thus sales of e.g: candles or other products made from paraffin wax. In our opinion, however, this development is only short-term and will probably soon be a thing of the past. Because the demand for candles and other wax products has not basically collapsed and will normalise again in autumn and winter.
Future development of paraffin wax prices
This current reduction in the price of paraffin waxes should not be interpreted as a long-term sign of a falling market. The trend could even be reversed if the determining factors interact correctly. At the moment we are experiencing with other raw materials what could possibly happen to paraffin wax:
If the demand for other crude oil derivatives such as diesel, gasoline and other fuels and lubricants remains low over the long term, larger refinery capacities may be taken off the grid. This will have an impact on the availability of by-products such as paraffin slack wax. This could disrupt the production of paraffin wax full raffinates. This disruption to traditional production processes could therefore lead to lower availability of paraffin waxes in the future.
Availability of paraffin wax at DistrEbution GmbH
Currently DistrEbution GmbH still has very good access to different paraffins from Germany, Europe and Asia. This situation could therefore be a good opportunity to stock up on inexpensive paraffin waxes before the prices will rise again or some types are not or only insufficiently available. If you have a demand of several tons, we would be pleased to advise you individually or talk to you about possible long-term contracts to secure your supply chain. Please do not hesitate to contact us.
