Global FT Wax Capacity, Production, Demand-Supply, Pricing and Market Forecast Analysis, 2032

Fischer Tropsch Wax Introduction:

A wax is a semi-solid substance at room temperature and melts into a low viscosity liquid at a temperature above 40 ?C. Waxes extracted from plant, animal and petroleum sources are natural wax whereas, wax synthesized from natural gas or coal through Fischer Tropsch process or from alpha olefins is called synthetic wax. Natural wax is further classified into animal or plant wax, mineral wax, and petroleum wax. Petroleum waxes are obtained as a by product in the production process of base oils. Synthetic wax can be classified into FT wax, polyethylene wax, and other synthetic wax. Fischer Tropsch wax is a synthetically produced wax from natural gas or coal through gas-to-liquid technology (GTL) or coal to liquid technology (CTL). The commercial use of the FT wax process started in Germany somewhere during World War 2 with further use in Texas, USA. Currently, Shell and Sasol are two major companies with FT waxes in their FT product portfolio.  FT waxes differ from petroleum-based waxes in that they have a high crystalline content and primarily contain n-alkanes.

FT Wax Production Analysis:

FT wax is produced as a byproduct during production of liquid fuels from hydrogen and carbon monoxide in the presence of iron or coal-based catalysts.  The synthetic gas produced from natural gas or coal, reacts to produce a mixture of normal paraffins with broad chain length distribution, ranging from light gases, over naphtha and middle distillate to waxes. The Fischer-Tropsch process can be described by the following equation –

(2n+1)H2 + nCO ? CnH(2n+2) + nH2O , where n is an integer.

The crude Fischer-Tropsch wax can be further processed by fractional distillation, hydro-treating and/or de-oiling. De-oiling can be achieved by different methods such as solvent de-oiling, static crystallization, or sweat de-oiling.

On a global level, manufacturers such as Dutch Shell of Malaysia and South Africa's Sasol, have optimized their GTL methods with natural gas as raw material and cobalt-based low-temperature Fischer-Tropsch synthesis process to derive a maximum yield of FT wax. China, on the other hand, has based its production techniques on Fe-based coal liquefaction, CTL methods which give liquid fuels such as gasoline, LPG, DME along with FT waxes.

FT wax application in hot melt additives. In hot melt adhesives, FT wax is used in the formulation of metallocene polyolefin copolymer and EVA- based hot melt adhesives due to its properties such as temperature resistance, thermal stability, elongation, flexibility, cohesive and bond strength. Other applications includes asphalt additives, candles and emulsifying waxes, plastic and rubber processing, printing inks and coatings, personal care & cosmetic products, textile, polishes etc.

FT Wax Demand-Supply Analysis:

FT Wax Demand-Supply Analysis

Globally, the demand of FT wax was around 680 kilo tons in 2023. Asia-pacific dominated the market with market share of around 57% followed by Middle East and Africa at 24%. The global capacity of FT wax was around 1000 kilo tons in 2023. China, Malaysia and South Africa are the only countries which produces FT wax. Countries such as Germany, France, Italy, India, China etc import FT wax from Malaysia and South Africa. Apart from Sasol and Shell, there are several manufacturers in China such as Shenhua, Yitai Chemical, Jushi Energy, Tianji Luan Chemical etc. Sasol has a manufacturing unit of capacity 280 kilo tons in Sasolburg operated at an average rate of 80%, South Africa. Sasol decided to expand their capacity in two phases with first phase being commissioned in 2015.

FT Wax Capacity Analysis:

However, the expansion project was stopped as the additional capacity will lead to oversupply in the market and due to Sasol didn’t receive adequate amount of natural gas from Mozambique. Half of FT wax produced in the MEA is Hard FT wax which is exported while residual or soft wax produced has large domestic demand. The region is observed to supply 40-45% of its exports to Germany, 15-17% of its exports to USA, 10-15% of its exports to India and remaining exports to countries like China, Italy, Turkey, UK, Netherlands, Japan and Spain. In Malaysia, Shell has a unit in Bintulu of capacity 150 kilo tons operating at a rate of 75%. Malaysia exported around 90% of its FT wax to USA, Germany, China, Japan and India to meet their demand in 2023.

FT Wax Market Overview:

The market of FT wax is driven by development in its end-use industries. As per Prismane Consulting report of Fischer Tropsch Wax, plastic and rubber processing industry is estimated to be leading consumer of FT wax in 2023. It is also estimated to be the fastest growing segment at a CAGR of 9% during 2023-2032. FT wax is used in injection molding and extrusion processes in plastic industry. Due to high crystallinity and liner structure of FT wax, it is used as the external and internal lubricant in PVC products. This helps to disperse fillers and pigments during compounding of modified PVC products. The increasing demand of PVC pipes and profiles in the construction industry is driving the demand of FT wax in plastic and polymer industry. In 2021, China installed total of 14280 kilo tons of PVC resins to cater to domestic and international markets. Russia’s domestic PVC demand was 850 kilo tons created huge demand for polymer converter to opt for FT wax to manufacture PVC products like pipes & fittings and profiles.

FT Wax Pricing Analysis:

Another driver of the FT wax market is a low price of its raw material. At present, the Natural gas value is around 8.31 USD/MMbtu and the Crude oil (WTI) price is around 86.79 USD/barrel. This makes natural gas approximately 50-80% cheaper than crude oil. The price competitiveness between natural gas and crude oil will draw more investments in GTL based products in near future.

FT wax market is also driven by its opportunity to replace paraffin wax in its end use applications. In Europe, Ft wax is replacing paraffin wax in candles as the end-product obtained is with better enhanced properties at similar or lower prices than paraffin wax. In coming years, addition of new blends and variants of FT waxes for paints and coatings and rubber additives is expected to begin new opportunities for FT wax to replace paraffin wax.