First, China paraffin wax production and marketing
Paraffin wax in the former international market is a shortage of commodities, in addition to Asia's China, Europe's Germany is oversupplied, the vast majority of countries and regions in the world paraffin supply is in short supply, so the international paraffin market is very active. In recent years, the development of China's paraffin industry is very rapid, and the output and market scale have developed and grown unprecedentedly. According to the data, China's paraffin wax production as a whole showed an upward trend from 2010 to 2019, and China's paraffin wax production reached 1.52 million tons by 2019. In early 2020, due to the impact of the new crown epidemic, the paraffin factory was shut down, reducing paraffin wax production to 1.42 million tons in 2020.
Source: Collation of publicly available information
The consumption of paraffin as a raw material for candles is decreasing year by year, and the application of paraffin wax in industries such as explosives, rubber, fiberboard, food, pyrotechnics, wire, cable and batteries is increasing. In 2018, China's paraffin wax consumption reached 919,000 tons, and then due to the impact of the 2019 Sino-US trade war and the new crown epidemic, China's paraffin consumption declined for two consecutive years, and by 2020, China's paraffin consumption fell to 823,000 tons.
Second, paraffin wax production capacity
The total production capacity of paraffin wax in China is about 2.1 million tons / year, concentrated in a small number of private enterprises such as PetroChina, Sinopec 2 major groups and Panjin Beiyan, with a high concentration. PetroChina is concentrated in Fushun Petrochemical, Dalian Petrochemical, Daqing Petrochemical, Daqing Refining and Lanzhou Petrochemical, while Sinopec is concentrated in Gaoqiao Petrochemical, Jingmen Petrochemical, Nanyang Fine Wax Factory and Taizhou Petrochemical. In 2020, the annual production capacity of PetroChina paraffin wax has increased, Fushun Petrochemical has built a new 600,000 tons / year of ketone benzene plant, so that the paraffin wax (including soap wax) production increased by 150,000 tons / year, Daqing Refining and Chemical built a new 600,000 tons / year of ketone benzene de-oiling device, at the end of 2020 paraffin wax production capacity increased from 150,000 tons / year to 300,000 tons / year, Panjin North Asphalt Fuel Company paraffin wax plant started in August 2018, hydrogenation unit started in September 2019, paraffin wax production capacity increased by 80,000-100,000 tons / year.
At present, the domestic paraffin wax market production model is relatively stable, mainly semi-semi-refined paraffin wax, the grade is from 54#-64#, the main demand is still semi-refined wax. Although the total wax production reached about 50% of the total, it was mainly used for export, mainly related to the level of domestic economic development and paraffin consumption.
Related report: "2021-2026 China Paraffin Industry Development Monitoring and Investment Strategic Planning Research Report" released by Huajing Industry Research Institute
Third, paraffin import and export
China is the world's paraffin resources, production, export and consumption of large countries. With the continuous expansion of paraffin wax, the world paraffin trade volume is also increasing. In particular, China is the world's main exporter of paraffin wax, and its export volume accounts for more than 60% of the world's total paraffin trade.
According to the data, China's paraffin wax exports in 2019 were 634,700 tons, up 25.14% year-on-year. In 2020, due to the impact of the new crown epidemic, the production of paraffin wax declined, so that paraffin exports also declined, by the end of 2020, China's paraffin wax exports fell to 612,500 tons, down 2.5% year-on-year.
Compared with exports, paraffin imports as a whole are at a low level, in 2015 paraffin imports fell to less than 10,000 tons, and then paraffin imports have been maintained at 5000-7000 tons, in 2019 China paraffin imports of 6700 tons. In 2020, due to the impact of the new crown epidemic, the domestic paraffin wax production was reduced, coupled with the decline in paraffin prices in the international market and the rise in domestic paraffin prices, the export volume of paraffin wax in 2020 rose rapidly, reaching 15,100 tons, up 125.37% year-on-year.
Fourth, the future development trend of paraffin wax
1, the domestic paraffin wax production capacity and output will continue to increase
PetroChina Daqing Petrochemical plans to build a new 600,000 tons/year ketone benzene de-oiling plant, and Dalian Petrochemical is expected to affect paraffin wax production due to the decline in the supply of crude oil in Daqing. Sinopec Maoming Petrochemical is expected to build a new Class I base oil plant of 1 million tons/year, which is expected to increase paraffin production (8-10 million tons/year), while producing some microcrystalline wax products. Taizhou Petrochemical is expected to shut down during the 14th Five-Year Plan period and Takahashi Petrochemical is expected to start relocation work in 2023, which will lead to a decline in petroleum wax and specialty wax production. It is expected that the overall production and quality of domestic petroleum wax will show an upward trend in the next 5 years. Paraffin downstream products are mainly concentrated in candles, auxiliaries, plates and cartons, especially candles still occupy more than 40% of the share.
2. International and domestic policies and regulations have a greater impact on paraffin sales
For example, the export of paraffin wax for processing and export of incoming materials is exempt from VAT, and the export of PetroChina Dalian Petrochemical, Sinopec Maoming and Gaoqiao petrochemical products benefits significantly; environmental protection inspections continue to be high-pressure, some downstream industries are limited to production and production, and the operating rate is insufficient; and paraffin wax imported from the United States with an oil content of less than 0.75% is not subject to additional tariffs.
Since 2017, The rapid development of Fischer-Tropsch wax, Yitai Chemical, Shanxi Lu'an and other enterprises of Fischer-Tropsch wax production technology has gradually improved, the melting point is reduced, the brand is rich, the price is lower (less than paraffin wax 1000 yuan / ton) can compete in the fields of daily chemicals, rubber and plastic processing, hot melt adhesive, ink and coatings, and seize the paraffin market share.
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