Like most industries, the paraffin wax industry has undergone tremendous change over the past 30 years driven by technology, economics, and materials. Paraffin waxes were originally a worthless byproduct of lube oil refining.
Over the years, hundreds of valuable applications developed for paraffin waxes. However, the economics and scale of paraffin wax refining were never of great interest to most large refineries. As a result, most refineries converted lube oil production from extraction of paraffin waxes to catalytic dewaxing. Catalytic dewaxing eliminates paraffin wax by reforming the wax molecules to oils. This change in technology resulted in the slow but steady decline in North American paraffin wax production over the last three decades. As these changes occurred, new processes for hydrocarbon wax production evolved based on ethylene and methane.
As paraffin wax demand exceeded diminishing supplies, selling prices increased, which improved the economics of refining and synthesizing waxes. Today, new capital investments are underway to expand production of hydrocarbon waxes based on crude oil, ethylene, and methane. Some recent capital investments include:
- Refined paraffin waxes. The world’s largest paraffin wax refinery in Baton Rouge, Louisiana is expanding wax production substantially. Baton Rouge is poised to be the global center for paraffin wax production and supply. The raw material for refined paraffin waxes is crude oil.
- Olefin waxes. Waxes based on ethylene have been widely used as a rigid PVC lubricant for the last 40 years. Production capacity in the United States for these waxes has doubled over the last few years. Production capacity was also added recently in the Middle East. New producers are now considering entering the market.
- Fischer-Tropsch (FT) waxes. Fischer-Tropsch waxes are made from methane. Production of FT waxes started in South Africa. A second production facility for producing FT waxes was built in Malaysia about 25 years ago. Both these facilities have expanded recently, substantially increasing the global supply of FT waxes. In addition, a new FT wax plant started production recently in China. Two small scale FT plants are scheduled to start wax production in the United States within the next two years.
As a result of all these capital investments, the outlook for the various grades of high quality waxes widely used in the North American rigid PVC industry is excellent. In addition to the three wax feedstocks discussed above, various strategies to reclaim waxes from polyethylene waste and recycle streams are also being developed.
Paraffin waxes continue to be the most cost effective primary lubricants for rigid PVC. America’s paraffin wax production and supply should be sufficient to meet the needs of the entire North American rigid PVC industry for many decades to come.