Stearic acid is also known as stearine. This is a long chain fatty acid that is an animal fat byproduct.

With candle making, it is used to modify the melting point of wax. Unless the wax is very 'high grade' (higher melting point) wax, adding steric acid will raise the melting point. By itself Steric acid has a melting point of 160 degrees Fahrenheit (paraffin wax has a melting point between 120 and 140 degrees Fahrenheit, beeswax has a melting point of 145 degrees Fahrenheit). When combined with wax it forms a strong crystalline structure that makes the candle harder and stiffer. Typically it is used in about 2-9 tablespoons per pound of wax.

Steric acid also makes the wax more opaque and less likely to drip. Candles can be made completely out of steric acid. These candles are often used in churches where long burning candles that do not drip or smoke excessively are required.

Also known as:
cetylacetic acid
hydrofol acid 1855
hydrofol acid 1655
1-heptadecanecarboxylic acid
heptadecane-carboxylic acid
octadecanoic acid
stearin

Stearic acid is a long-chained fatty acid obtained by treating animal fats (especially beef tallow) with water at high temperature and pressure, or by the hydrogenation of vegetable oils (especially cocoa butter). In its pure form, it is a white or yellowish, hard, waxy powder or flakes. When melted, it becomes a clear liquid.

Stearic acid is used primarily as a thickener and emulsifier (a chemical that allows oil and water to mix) due to the creamy, pearly appearance and soft, soothing texture it gives to lotions. You probably have at least half a dozen items in your home that contain stearic acid. It's used in candles, soaps, cosmetics, moisturizers, creams, lotions, and other personal care products. It is usually found in concentrations of 2-10%. Although it is an acid, in low concentrations it is not an irritant.

Stearic acid helped make the transition from tallow to paraffin candles in the 19th Century. Paraffin is a better substance for a candle because it burns cleanly and has no unpleasant odor. However, paraffin has a lower melting point and candles made from pure paraffin burned faster than those made from tallow. Adding stearic acid to the paraffin solved this problem, and modern candles are generally made from a stearic acid and paraffin mix. Other substances that could have replaced tallow are generally too expensive or labor-intensive to make.

In most other applications, stearic acid is just a thickener, a hardener, an emulsifier, or a combination of the three.

Sources:
http://tom1.sphosting.com/candleshistory.htm
http://www.bioskincare.com/cream-base.htm
http://physchem.ox.ac.uk/MSDS/ST/stearic_acid.html
http://www.sssoaps.com/ingredients.php
http://www.makingcosmetics.com/shop/en-us/dept_10.html
http://www.freewebs.com/kissingmoons/ingredients.htm

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