Over the next decade, we estimate that there will be a sizable gap between supply and demand in the global wax market9

alternative wax products.

Waxes are used to make various valuable, everyday products such as crayons, candles and hot melt adhesives. They are also used in materials such as packaging supplies, PVC piping, and other construction materials.

Although these products can be produced with alternative wax components such as animal, vegetable and synthetic, paraffin waxes have been widely available and used historically.

While the use of alternative wax sources has increased due to concerns of paraffin wax supply availability because of Group I rationalisation, paraffin wax will continue to supply the majority of the wax industry’s needs.

Group I will continue to be beneficial The global drive for greater fuel efficiency and extended service life is influencing finished lubricant markets, in particular automotive engine oils in North America and Northwest Europe, where Group II and III demand has increased relative to Group I.

The conversion from Group I to Group II and III base oil demand is adding significant pressure to the viability of some Group I assets, and has already resulted in the rationalisation of several less efficient Group I base oil plants, resulting in an overall decline in the supply of Group I base oils over the past 10 years.

This has also negatively impacted the availability of valuable co-products, such as paraffin wax, and additional rationalisation is expected in the future.

The concern of future Group I supply availability is causing customers to develop new formulations based on Group II across several application areas, primarily automotive.

However, even though Group II is becoming more prevalent globally, it is not always the best fit for applications.

Therefore, Group I will continue to be valued well 9 Based on ExxonMobil assessment of publicly available information

- which will create an opening for

into the future by applications that benefit from high viscosity and/or high solvency, particularly heavy neutral and bright stock used in marine, gear oils and greases.

Beyond technical and cost advantages, Group I production will continue to be critical in closing the supply-demand gap in the growing wax market, particularly for paraffin waxes, a co-product of Group I, which are expected to have high demand.

While some refiners have decided to rationalise due to decreasing Group I demand, ExxonMobil recognises its continued importance and remains committed to Group I long-term production.

ExxonMobil will maximise the value of all products from Group I assets to ensure long term competitiveness.

Group I base oils – and associated co-products – have unique qualities that are advantageous in various applications that value high viscosity and/or high solvency, particularly heavy neutral and bright oil used in marine, gear oils and greases.

A customer that requires the unique attributes offered by Group I base oils and its co-products should look for a supplier that will have the means to be successful in the long term – deep knowledge and expertise across the full value chain, access to advanced technology, as well as a strong global footprint and investment capability.




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