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For August and September, market expectations for improvement are relatively limited, with lingering concerns. It is anticipated that paraffin transactions will continue to weaken, bearish sentiment for semi-refined paraffin is intensifying, while fully refined paraffin is expected to maintain stable operations.
Paraffin demand: The growth in paraffin wax market demand has fallen short of expectations. On one hand, the growth in the real estate sector has been modest, leading to sluggish demand in traditional paraffin application areas. Downstream procurement remains cautious, and overall profit margins for intermediaries are limited. On the other hand, the impact of trade tariffs, coupled with the EU's imposition of anti-dumping duties on Chinese candles, has negatively affected both paraffin and candle exports. This has resulted in lower export volumes in the second half of the year compared to the first half, exacerbating the stalemate in transactions.
Supply side expectations are tight: Due to planned maintenance shutdowns of facilities for two months, market supply is expected to be tight. It is anticipated that fully refined paraffin resources will remain tight in the third quarter, providing support for prices. Semi-refined paraffin production is relatively concentrated, and sales challenges persist, putting downward pressure on prices.
Demand recovery is key: Whether market demand can rebound with seasonal changes will determine the procurement willingness of end-use businesses, thereby influencing paraffin price trends. Currently, substantial improvements in demand remain unclear, and industry players lack confidence. A breakdown by specific sectors is as follows:
In August and September 2025, candle exports are affected by policy measures, and monthly export volume trends may deviate from previous years. China's candle exports to the EU account for 38%-44% of total exports. Considering the EU's anti-dumping duties on Chinese candles, Chinese candle companies actively exported during the window period, and it is expected that candle exports in the second quarter will perform reasonably well, providing some overall support. However, a significant year-on-year decline in candle exports is anticipated for the third quarter. To counter export pressures, Chinese candle companies have already intensified efforts to expand into markets such as Southeast Asia, Africa, and Europe, which may partially offset the decline in exports to Europe and America.
Demand is unlikely to see significant improvement, and the outlook for the future is subpar. On one hand, due to high-temperature holidays at vehicle manufacturers, some factories still have maintenance shutdowns scheduled for August, and operational rates may decline again. Additionally, export market orders may not match previous levels, and some manufacturers may reduce operations due to decreased orders. Overall, domestic demand in the tire market for August and September is weak, export market pressures persist, and comprehensive operational rates are unlikely to show new positive trends. Market caution remains evident.
The market exhibits a pattern of "hot upstream, cold downstream." Upstream pre-sale orders have surged, and factory inventories have declined. However, considering that transmission to midstream and downstream remains sluggish, traders face a complex situation of both active and passive inventory accumulation. With the establishment of a policy floor and a shift in cost focus upward, the PVC market still has opportunities for volatile price increases. Currently, close attention is being paid to changes in the supply of coking coal and coke for cost-side guidance. Market participants remain cautious and are adopting a wait-and-see approach in August and September.
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