Foreword
Spandex industry experienced sharp change since 2020: it saw a good performance which was rare within recent decade and new capacity surged after seeing high prosperity, while spandex market returned to supply glut again. Price of energy and chemical products such as petroleum, coal and calcium carbide was medium-to-high. Spandex market still faced strong cost support. With bullish policies, the supply of spandex turned to be tight again at the beginning of 2023 and the prices apparently rallied. Will strong spandex market sustain strong? Will demand for spandex welcome a high increase again?
Core views
1. The growth rate of spandex supply is far higher than that of demand. With expanding divergence between supply and demand, the price of spandex may shiver in short run but gradually return to near the break-even line again. Yearly price of spandex 40D is expected to apparently decrease in 2023 over 2022. Price of spandex was low at first but high later in the first quarter of 2023, which inched down at the end of Q1 with unsmooth demand. In the second quarter, the competition may intensify further after many new units started operation. Coupled with the finish of orders for spring and summer wear, price of spandex may reduce. In the second half of 2023, the prices of energy and chemicals and the price spandex feedstock after capacity surged should be concerned. Price of spandex is estimated to be firm in end-Q3 and early-Q4.
2. Spandex industrial chain was in deep downtrend in 2022 impacted by the pressure from supply and demand. Spandex price was low and became popular for downstream customers again. Elastic fabrics plants focused on digesting spandex inventory prepared before or mainly purchased to cover the pressing demand in 2022 but turned to normal production and replenishment in 2023. Chinese government promotes the recovery of economy and consumption. Price of spandex is relatively low, which makes spandex penetrate stronger to downstream sector. The capacity expansion of downstream high-density circular knitting machine after the COVID-19 pandemic lays foundation for the recovery of demand for spandex, which is expected to stimulate the recovery of prosperity on spandex market in 2023. Demand for spandex is expected to see medium-level growth in 2023.
Content
1. Yearly new capacity marginally increases
(1) New spandex capacity in 2021-2023
(2) The growth rate of spandex capacity is expected to be as high as 14.1% in 2021-2023
2. Competition of spandex industry becomes more diversified
(1) More spandex companies extend to upstream sector
(2) The supply concentration ratio of spandex rises further
(3) Upstream market and other products extend to spandex sector
A. Upstream market extends to spandex sector
B. Chemical fiber companies expand to spandex industry
1. Price and expectation
2. Profit and expectation
1. Analysis of demand
(1) Demand: the darkest time has been passed
(2) Analysis of operating rate of downstream fabric mills
2. Domestic sales of textiles and apparels
(1) Textile and apparel consumption ranked second from the bottom in domestic retail sales
(2) Analysis of turnover of fabrics in Chine Textile City
3. Exports of textiles and apparels
4. Demand expectation: higher prosperity, better domestic sales than export
Chart
Chart 1. Spandex industrial cycle
Chart 2. Spandex capacity in Chinese mainland in 2018-2023
Chart 3. Capacity proportion of top five spandex companies in Chinese mainland
Chart 4. Price of spandex 40D in 2001-2022
Chart 5. Growth rate of BDO-PTMEG and spandex capacity in 2019-2023
Chart 6. Cash flow of BDO, PTMEG and spandex 40D in 2018-2022
Chart 7. Growth rate of demand for spandex in Chinese mainland in 2018-2022
Chart 8. Yearly operating rate change of fabric mills in 2021-2022
Chart 9. YOY change of retail sales of social consumer goods in Jan-Dec, 2022
Chart 10. Export value of textiles and apparels and growth rate in 2018-2022
Chart 11. Monthly export value of textiles and apparels in 2021-2022
Chart 12. Export structure of textiles and apparels in 2022
Chart 13. Price of major raw materials of textiles and apparels in 2022
Chart 14. Domestic M2 growth rate and spandex price trend
Table
Figure 1. New spandex capacity in 2021-2023
Figure 2. Yearly turnover of fabrics in Chine Textile City
If you need the report, please contact us at:
T 86-571-8378 6653, 8378 6504
F 86-571-8378 6600
Email: market@ccfgroup.com
