The price has almost halved, making it even harder to get money back! The million-ton unit is about to be put into operation again, and there are a lot of new spandex projects recently!

After the outbreak of the new crown epidemic, it became an important raw material for the production of anti-epidemic materials and masks. In addition, the raw materialBDO’s downstream demand surged and the price rose rapidly after the promulgation of the plastic restriction order. As a result, the price of spandex 40D once broke through in the past two years. 80,000 yuan/ton mark. By the beginning of 2022, the mainstream quotation of spandex 40D dropped to 58,000-62,000 yuan/ton. At the end of July, the ex-factory price of spandex 40D was only 36,000 yuan/ton, which was almost halved compared with the beginning of the year.

The downstream demand for spandex is mainly concentrated in circular knitting machines, yarn wrapping, warp knitting, cotton bales and other fields. Affected by the downturn in the domestic textile industry, the profits of downstream circular knitting machines, wrapped yarn and other weaving industries have declined, and funds are tight. The shortage of funds has caused problems in the start-up and sales cycle of downstream enterprises. A large number of downstream small and medium-sized enterprises have relatively difficult financing. This year’s downstream market The overall operating rate has been recovering slowly, which has reflected the insufficient incoming new orders from the downstream industry. In addition, against the backdrop of the overall downturn in the industry, it is even more difficult to collect payments.

As a result, the downstream industry as a whole began a series of vicious cycle patterns caused by tight funds, namely: tight funds and insufficient available funds – Weaving companies received fewer orders – Inventory products began to accumulate – Revenues have shrunk, profits have declined – funding continues to be tight – inventory products have been sold off – profits have further deteriorated. The negative circulation effect of capital has caused the vicious transmission of weakness in the spandex industry chain to be difficult to alleviate.

But even so, the spandex industry is still actively expanding production to seize the market, and a new round of production capacity expansion may cause certain changes in the production capacity structure.

One hundred thousand tons unit is planned to be put into operation

There are a lot of new spandex items recently!

According to data monitoring, the domestic spandex market will enter a new round of capacity expansion and growth in the next five years, and a million-ton differentiated spandex device is planned to be put into production. In recent years, the contradiction between supply and demand in the spandex industry has not improved significantly, and the supply and demand relationship in the domestic spandex market may be greatly tested in the future.

On September 6, Xinxiang Chemical Fiber Co., Ltd.’s 6,000-ton-annual recycled spandex project was successfully launched.

On August 15, Shenmu City and Shandong Xinfa Group Energy Co., Ltd. signed a circular economy project with a total investment of 18 billion yuan for the efficient conversion of Shenxin coal into high-quality materials and the downstream intensive processing of BDO. This includes a 400,000 tons/year spandex plant.

On August 8, the Ningdong Energy and Chemical Industry Base Management Committee and Taiguang Industrial Co., Ltd. signed a “Project Cooperation Framework Agreement” in Yinchuan, Ningxia. South Korea’s Taiguang Industry’s annual output of 108,000 tons of differentiated spandex project officially landed in Ningxia.

On July 25, Dawn Group successfully signed a contract with Aksushaya County in Xinjiang for an annual production of 100,000 tons of 1,4-butanediol (BDO) project, including an annual production of 100,000 tons of spandex project.

On June 30, the first phase of the Yongying New Materials Integrated Industrial Chain Project with an annual output of 800,000 tons of functional new materials invested by Yongrong Holding Group Co., Ltd. started construction in Nanchong Economic Development Zone. The total investment in the project is approximately 33 billion yuan, including a 300,000 tons/year spandex device.

On June 28, the organic renewal project of high-performance spandex with an annual output of 15,000 tons, invested and constructed by Hangzhou Qingyun New Materials Co., Ltd. started construction!

On June 12, Huafon Chemical Co., Ltd. announced: The 100,000 tons/year differentiated spandex project invested and constructed by its holding subsidiary Huafeng Chongqing Spandex Co., Ltd. is constructed in two phases. The first phase has been completed in It was put into production in June 2020, and the second phase was commissioned in August 2021. It has been officially put into production. At this point, Huafon Chemical’s total spandex production capacity will reach 225,000 tons/year.

On May 20, Xinxiang Chemical Fiber Co., Ltd. announced that it plans to raise no more than 1.38 billion yuan in additional capital for the third phase of the high-quality ultra-fine denier spandex fiber project with an annual output of 100,000 tons.

In May 2022, Ningxia Guanneng New Material Technology Co., Ltd.’s polymer, biodegradable materials and upstream supporting industry chain projects were officially launched in Pingluo County, Shizuishan, Ningxia. The first phase project includes a 120,000 tons/year spandex device, and the second phase project includes a 180,000 tons/year spandex device.

On April 6, Xinxiang Chemical Fiber held the commissioning ceremony of the second phase project with an annual output of 100,000 tons of ultra-fine denier spandex (annual output of 30,000 tons of spandex) and the commencement ceremony of the third phase project (annual output of 40,000 tons of spandex).

On February 14, the People’s Government of Xinluo District, Longyan City, Fujian Province and Xiamen Lilong Spandex Co., Ltd. signed a Lilong Spandex production project agreement. The total investment is expected to be 6.5 billion yuan. The project is constructed in three phases, with a total of 2 PTG production devices and 8 spandex production lines and supporting production devices built.

Sluggish demand for textiles and clothing

Drag the performance of listed spandex companies

In recent years, with the deepening of the supply-side structural reform, the market share of small and medium-sized enterprises has been shrinking, and the spandex market concentration has increased. Among them, Huafon Chemical, Hyosung Spandex, Xinxiang Chemical Fiber, Huahai Spandex and Taihe New Materials have a market share of relatively high. my country’s new spandex production capacity is mainly concentrated in leading companies. It is expected that during the “14th Five-Year Plan” period, the cumulative new production capacity of my country’s top five manufacturing companies will exceed 850,000 tons. However, sluggish demand has also dragged down the performance of listed spandex companies. Let’s take a look at the performance of spandex companies in the first half of 2022.

Taihe New Materials: Net profit fell 33.83% year-on-year

On the evening of August 29, Taihe New Materials disclosed its semi-annual report. The company’s operating income in the first half of 2022 was 1.952 billion yuan, a year-on-year decrease of 8.19%; The net profit attributable to the parent company was 291 million yuan, a year-on-year decrease of 33.83%. ;Basic earnings per share is 0.43 yuan. In the first half of 2022, the downstream demand market for spandex was sluggish, and new production capacity continued to be released, resulting in a sharp drop in prices. At the same time, raw material prices continued to be high, and the company’s spandex sector saw a sharp decline in profitability.

Huafeng Chemical: Net profit fell by 37.81%

On the evening of August 4, Huafon Chemical released its 2022 semi-annual report. The company achieved operating income of 13.838 billion yuan, a year-on-year increase of 7.31%; Net profit attributable to the parent company was 2.395 billion yuan, a year-on-year decrease of 37.81%. Among them, the operating income of chemical fiber products (spandex) was 5.603 billion yuan, a year-on-year decrease of 8.79%; the gross profit margin was 19.08%, a year-on-year decrease of 29.29 percentage points. A relevant person from Huafeng Chemical said: “The poor demand for textile and clothing has led to a poor market sentiment for spandex, and the downstream demand for adipic acid has also been poor. A combination of multiple factors has led to a decline in performance.

Xinxiang Chemical Fiber: Net profit fell 98.72% year-on-year

On the evening of August 11, Xinxiang Chemical Fiber disclosed its 2022 semi-annual report, which showed that the company achieved revenue of 3.964 billion yuan, a year-on-year decrease of 3.84%; The net profit attributable to shareholders of listed companies was 9.4224 million yuan, a year-on-year decrease of 98.72% ; After deducting non-net profit, the loss was 7.5265 million yuan, turning from profit to loss year-on-year. The main products of Xinxiang Chemical Fiber are spandex and viscose filament. In the first half of this year, spandex achieved revenue of 2.448 billion yuan, accounting for 61.75% of total revenue, a year-on-year decrease of 12.59%; the gross profit margin was 10.06%, a year-on-year decrease of 30.91%. A person related to Xinxiang Chemical Fiber said: In the context of low demand due to the epidemic, although there are various measures to improve profitability, the results are not satisfactory, but the company is still optimistic about the future prospects of spandex, and the private placement project is proceeding as planned. The industry still has plans to expand production.

Nanjing Chemical Fiber: Net profit fell 146.59% year-on-year

On August 25, Nanjing Chemical Fiber released the full text of its 2022 interim report. The report shows that in the first half of 2022, Nanjing Chemical Fiber achieved revenue of 270 million yuan, a year-on-year increase of 4.87%; net profit was -63.149 million yuan, a year-on-year decrease of 157.53%; net profit attributable to shareholders of the listed company was -55.0745 million yuan , a year-on-year decrease of 146.59%.

The spandex industry may enter a period of low profits

At present, the spandex industry is gradually transitioning from the 21-year high boom cycle into an adjustment cycle. The main driving force comes from the increase in supply. If the reserve production capacity of some companies reaches full capacity, the industry may face the pressure of oversupply. With the continuous release of production capacity, the spandex industry may enter a period of low profits.
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