test


Member ID:
Password: 
Stay logged in for 30 days
Forget Your Password?
close

login CCFGroup App

Insight | Time: Jul 24 2020 1:47PM
Spandex market review in H1 2020
 
Text size
Operation: capacity slightly increased and run rate dipped
Some new spandex units started operation in the first half of 2020. Huafon Chongqing’s Phase III unit with 30kt/year of capacity started trial production in end-Mar and commenced complete operation in May-Jun. SheiYungHsin’s 8kt/year capacity was demolished at the beginning of 2020, being deducted from the capacity in Chinese mainland. By the end of Jun, spandex capacity amounted to 872kt in Chinese mainland, up by 2.6% compared with the end of 2019.

Operating rate of spandex market curved a “V” trend in the first half of 2020, averaged at around 78.7%, down by 7% compared with the same period of last year. Many spandex companies cut or suspended production in Feb, end-Mar and early-Apr, resulting into lower run rate. Spandex companies passively cut production when the outbreak of pandemic in Feb restricted the logistic and further ended up with insufficient supply of feedstock and accessories. Later, spandex companies actively curtailed production after foreign orders for textiles and apparels reduced greatly amid the outbreak of pandemic abroad in late-Mar. Under such circumstance, spandex companies cut run rate to lower high stocks, control production and retard the accumulation speed of stocks. Operating rate of spandex market was largely above 80% in H1 2020, excluding Mar.


According to the data from CCFGroup, spandex production totaled 331kt in H1 2020, up 2.6% on the year. Although the operating rate declined on the year, most new units ran at full capacity, leading to increasing output.

Tendency: cash flow slightly recovered
Price of spandex 40D averaged at around 28,533yuan/mt in H1 2020, down by around 9.4% compared with the same period of last year. New capacity of spandex was huge in recent years, but downstream demand failed to chase up. Most new units that boasted high efficiency and low cost produced according to sales and focused on selling under low price. Industrial competition increased instead of weakened, and industrial shuffle continued.

Price of spandex descended in the first half of 2020 but the decrement was far lower than that of polyester and nylon. It was not easy to see such price this year. Soaring price of spandex for ear band of mask in Apr greatly dragged down stocks, and the operation pressure in spandex companies also alleviated after the payment collection accelerated. Price of spandex ended falling and stabilized in Apr and H1 May, slowing down the reduction speed on spandex price and ending up with recovering cash flow.


Cash flow of spandex market slightly recovered in the first half of 2020 compared with the corresponding period of last year mainly due to smaller decrement compared with its upstream feedstock. Price reduction of spandex slowed down driven by hot demand for those for ear band of mask, with decrement for conventional spandex below 3% or 1,000yuan/mt. However, the operating rate of spandex market was slightly lower in H1 2020 on the year, and cost ascended (including energy cost, labor cost and equipment maintenance cost). Stocks of spandex were slanting high based on the data in recent years. Overall selling price of spandex reduced as promotion of new products and degraded goods emerged frequently. Therefore, the actual cash flow of spandex companies did not recover much.

Import and export: both headed south

According to the data from China Customs, imports and exports of spandex (Hs code: 54024410) both reduced in Jan-May, 2020, with exports down by 6.8% on the year to 25.6kt and imports down by 17.2% y-o-y to 8,893mt. Decrement of imports was bigger with small cardinal number. Net exports amounted to 16.7kt, down by 0.1% compared with the same period of last year.


[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
Related Articles
Spandex market daily (Sep 30, 2019)
Price of new spandex orders gradually moves up
Hyosung revises up spandex price by 1,000yuan/mt
China fiber market operation status
Petrochemical market morning express (Sep 30, 2020)
Spandex market daily (Sep 29, 2019)
China chemical fiber market weekly forecast (Sep 29, 2020)
Price of spandex rises
Petrochemical market morning express (Sep 29, 2020)
Petrochemical market morning express (Sep 29, 2020)
 
Research
Development change of virgin PSF and recycled PSF and their ...
Polyester market review in H1 2020 and market outlook
PET bottle chip market to face challenges after an ...
Spandex market review in H1 2020 and market outlook
PTA and PX market outlook in H2 2020
Analysis on production changes of global major cotton ...
 
 

浙公网安备33010902000742号