The raw material BDO has surged during the month, and the downstream peak season is approaching. The price of spandex, which has been sluggish for a long time due to multiple factors, has recently stabilized. “Golden Nine and Silver Ten are the traditional peak seasons for the textile industry. Companies have received some new orders one after another, and the demand for spandex has increased to a certain extent. However, at present, high-end spandex products are out of stock, and the demand for ordinary products has increased slightly. .” Some insiders said.
High-end spandex products are expected to rise for the first time this year during the peak seasons of the Golden, Nine and Silver Tens.
Multiple factors may support price increases
As the source of elastic fiber for textile products, spandex has experienced a surge in demand for epidemic prevention clothing and masks in the past two years. The price of ordinary 40D products exceeded 80,000 yuan per ton at its highest. Since this year, the price of spandex has continued to fall. Since September, the price has stabilized. As of September 23, the price of ordinary 40D products has stabilized at 31,000 yuan/ton this week, and the price of high-end 20D products is 39,000 yuan/ton.
The rise in raw materials has provided price support for spandex. As of September 22, the price of BDO was 14,500 yuan/ton, an increase of more than 4,000 yuan/ton from the beginning of the month, with a maximum increase of 44%. The market was in short supply.
In addition, the operating rate of domestic downstream textile factories has increased significantly. Industry data from Longzhong Information shows that the operating rate of domestic downstream textile factories this week was 62.86%, an increase of 4.22% from last week and an increase of 16% from the end of August.
In September, due to smoother shipments, the inventories of spandex companies declined. Industry data from Longzhong Information shows that as of September 22, the inventory of domestic spandex companies was around 37 days, a slight decline from around 40 days at the end of August, but the overall inventory is still high.
There is pressure to increase prices due to the release of new production capacity
According to industry insiders related to spandex, the current domestic spandex production capacity is relatively concentrated, with Huafeng Chemical (002064.SZ), Hyosung Spandex, Xinxiang Chemical Fiber (000949.SZ), Huahai Spandex and Taihe New Materials (002254.SZ) having a relatively high market share. . After the production demand for anti-epidemic products dropped, the main factors affecting spandex prices were the continued sluggish downstream demand and the continuous release of new production capacity.
Although the shipment speed of spandex in September was significantly better than that in previous months, downstream companies are unwilling to bear higher cost pressure, and price games are obvious. In fact, since the beginning of September, spandex companies have wanted to achieve a wave of product price increases, but the downstream purchasing sentiment is not positive. Buyers do not recognize the new quotations from manufacturers and insist on negotiating based on the low point of the previous price. Especially for low-end products, the price increases. Price comparison is difficult. However, high-end products are more likely to see price increases in the near future as demand exceeds supply.
The price of spandex has stabilized recently, and the industry’s production capacity has increased significantly. As of this week, the spandex industry’s operating rate is 70%, and the equipment operating rate of large enterprises can be as high as 90%. However, the resulting loose supply and increased inventory have made it difficult to increase the overall price of spandex.
In addition, the pressure on new production capacity brought by the expansion of spandex production cannot be underestimated. The three companies with the largest new spandex production capacity this year are Huafeng Chemical, Hyosung Spandex, and Xinxiang Chemical Fiber. The actual new production capacity during the year was 40,000 tons, 36,000 tons, and 60,000 tons respectively. The announcement shows that on September 6 this year, the Xinxiang Chemical Fiber Relocation Project and the 6,000-ton recycled spandex project with an annual output were successfully launched, and the market supply is expected to increase.
The planned new production capacity of spandex in the future is still relatively high, with nearly one million tons of new production capacity started in the second half of this year.
With the continuous release of new spandex production capacity, the spandex industry may enter a period of low profits. In order to cope with the current low price of products, most spandex companies’ strategy for new production capacity is to suspend operations or reduce load to reduce market supply. Adding significant pressure on prices.
In addition, the continuous increase of new production capacity will accelerate the industry reshuffle of the spandex industry.
Li Zengjun, chief economist of the China Chemical Fiber Industry Association and executive vice president of the Spandex Branch, said in an interview: “No matter how the market situation changes, product innovation always comes first. Enterprises must find their own market positioning and develop differentiation. Products. It is necessary to speed up the elimination of backward production capacity and upgrade equipment with high energy consumption and low efficiency. The future of the industry depends on the innovation of raw materials and production technology.”
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