Market Dynamics
China has been rapidly increasing its demand for paraffin wax due to its widespread use in a number of industries. Paraffin is used in various end-user industries such as automobiles, paint, food products, cosmetics, candles, and plastics among others. This growth in demand has prompted Chinese manufacturers to increase their production capacity. In 2018, China’s aggregate demand for paraffin is expected to exceed 4 billion tonnes and is anticipated to increase significantly between 2018 and 2032 to reach 16.5 billion tonnes. This growth can be attributed to the rapidly-growing construction and auto industries in the country, as well as its rising consumer population. Furthermore, the Chinese government has introduced various favourable policies to promote the paraffin wax industry. For instance, it has abolished the VAT (value-added tax) on certain grade of paraffin wax production to support the indigenous paraffin wax production. Similarly, it has eased restrictions on capital transfers, allowing manufacturers to use offshore financing for large-scale projects. Moreover, it has also reduced the number of permits required for large-scale projects, making it easier for the industry to expand. In response to the increasing demand, Chinese paraffin manufacturers are focusing on developing innovative products and improving production processes.
They are also continuously investing in research and development activities, which help in improving the quality and production efficiency of the products. Also, some of the companies are also entering into partnerships and strategic collaborations to increase their product portfolio. Looking ahead, the Chinese paraffin wax market is expected to remain positive in the long-term. The strengthening economic conditions, the increasing number of end-user markets, and the various pro-market policies put in place by the government, are all likely to further propel growth over the forecast period. Hence, manufacturers should look out for the lucrative opportunities that the Chinese paraffin wax market offers.
