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VOLUME XXI

September 14, 2023

Everchem’s Closers Only Club

Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: read more

September 27, 2021

Chinese Spandex Update

Will spandex price plunge with weaker demand?
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Spandex prices continued surging in recent one year and current price has hit the highest level since 2008. Recently, export orders did not chase up smoothly and domestic demand was soft. Some dealers started revising down price. Will spandex price plunge later? Does market fundamentals of spandex change?  blob.png Supply There will be above 110kt/year of new spandex capacity to be launched in the second half of 2021 in Chinese mainland and it may bring about 30kt of production increase according to the startup time. By Sep 26, the operating rate of spandex plants declined to 93% from 97% in end-Aug. The control of total amount and the intensity of energy consumption is expected to affect spandex supply in short run. Some spandex plants scaled down production by around 10-40%. Xiamen Lilong suspended production due to the pandemic, affecting near 2% of spandex operation rate. Most old spandex units are still expected to run at above 90% of capacity and new units will gradually start operation.

Spandex production is anticipated to gradually ascend in Q4. blob.png Inventory The spandex inventory inched up but remained low now (the normal level was 30 days), supportive to price. By Sep 26, spandex inventory rose by around 8.5 days to above 13 days compared with early-Aug.  Supply tightness of conventional spandex varieties has eased, while stocks of medium-to-high denier spandex rose rapidly. The order change still should be concerned in Oct. If orders chase up, spandex inventory may accumulate slowly even if fabric mills only purchase spandex on a need-to-basis. That means price of spandex may be late to reduce. The price competition is supposed to be fierce again if the gap between production and sales expands demand.

The tempo of traditional peak season and dull season has been disrupted by the pandemic. The operating rate of downstream fabric mills was around 20 percentage points higher on the year in Jan-Aug, 2021 and around 10 percentage points higher than the 2019 level. However, the run rate apparently dipped after Aug. Affected by the control of total amount and intensity of energy consumption, dyeing plants’ operating rate obviously dropped in Zhejiang and Jiangsu, which will be bearish for the later operating rate of fabric mills.  blob.png The inventory of elastic fabrics was not high now. Stocks of some nylon/spandex air covered yarn, dralon fabrics and small circular knitting fabrics were above 1 month, mainly for the production of autumn and winter clothes. The stocks of high-density circular knitted fabric, polyester/spandex air covered yarn, cotton core-spun yarn and warp knitting super soft fabric were at 10-15 days.  Downstream buyers were unwilling to hoard up stocks when price of polyester and cotton was weak and that of NFY rose limitedly.

Price of spandex stopped rising and turned to shiver recently. Supported by low inventory, stable spandex price was supportive to the stabilizing of grey fabric price and the processing fee of covered yarn. If spandex price dips apparently, earlier spandex inventory will be depreciated and it will have negative influence on later orders for fabrics.  Cost Prices of PTMEG and BDO apparently rose and major feedstock cost of spandex was above 41,000yuan/mt for the first time, while spandex price shivered at high level. The price spread between spandex and its major feedstock has apparently narrowed to 7,500yuan/mt since end-Jul. 

Spandex price may be peaked affected by limited downstream orders and the control of total amount and intensity of energy consumption. Weakening demand surrenders weaker support to spandex price. Some spandex suppliers have revised down price. Spandex market are turning to be buyers’ market. Many buyers require discounts in actual transactions. Few dealers and fabric mills start underselling spandex. Price of spandex is not expected to plunge in short run supported by low inventory and firm feedstock price. New spandex units are scheduled to gradually commission operation and stocks of spandex may not rise much in short run. Therefore, price of spandex is expected to be firm in short run but weak in long run.

https://www.ccfgroup.com/newscenter/newsview.php?Class_ID=D00000&Info_ID=2021092730047

September 27, 2021

Chinese Spandex Update

Will spandex price plunge with weaker demand?
Save Print  

Text size

Spandex prices continued surging in recent one year and current price has hit the highest level since 2008. Recently, export orders did not chase up smoothly and domestic demand was soft. Some dealers started revising down price. Will spandex price plunge later? Does market fundamentals of spandex change?  blob.png Supply There will be above 110kt/year of new spandex capacity to be launched in the second half of 2021 in Chinese mainland and it may bring about 30kt of production increase according to the startup time. By Sep 26, the operating rate of spandex plants declined to 93% from 97% in end-Aug. The control of total amount and the intensity of energy consumption is expected to affect spandex supply in short run. Some spandex plants scaled down production by around 10-40%. Xiamen Lilong suspended production due to the pandemic, affecting near 2% of spandex operation rate. Most old spandex units are still expected to run at above 90% of capacity and new units will gradually start operation.

Spandex production is anticipated to gradually ascend in Q4. blob.png Inventory The spandex inventory inched up but remained low now (the normal level was 30 days), supportive to price. By Sep 26, spandex inventory rose by around 8.5 days to above 13 days compared with early-Aug.  Supply tightness of conventional spandex varieties has eased, while stocks of medium-to-high denier spandex rose rapidly. The order change still should be concerned in Oct. If orders chase up, spandex inventory may accumulate slowly even if fabric mills only purchase spandex on a need-to-basis. That means price of spandex may be late to reduce. The price competition is supposed to be fierce again if the gap between production and sales expands demand.

The tempo of traditional peak season and dull season has been disrupted by the pandemic. The operating rate of downstream fabric mills was around 20 percentage points higher on the year in Jan-Aug, 2021 and around 10 percentage points higher than the 2019 level. However, the run rate apparently dipped after Aug. Affected by the control of total amount and intensity of energy consumption, dyeing plants’ operating rate obviously dropped in Zhejiang and Jiangsu, which will be bearish for the later operating rate of fabric mills.  blob.png The inventory of elastic fabrics was not high now. Stocks of some nylon/spandex air covered yarn, dralon fabrics and small circular knitting fabrics were above 1 month, mainly for the production of autumn and winter clothes. The stocks of high-density circular knitted fabric, polyester/spandex air covered yarn, cotton core-spun yarn and warp knitting super soft fabric were at 10-15 days.  Downstream buyers were unwilling to hoard up stocks when price of polyester and cotton was weak and that of NFY rose limitedly.

Price of spandex stopped rising and turned to shiver recently. Supported by low inventory, stable spandex price was supportive to the stabilizing of grey fabric price and the processing fee of covered yarn. If spandex price dips apparently, earlier spandex inventory will be depreciated and it will have negative influence on later orders for fabrics.  Cost Prices of PTMEG and BDO apparently rose and major feedstock cost of spandex was above 41,000yuan/mt for the first time, while spandex price shivered at high level. The price spread between spandex and its major feedstock has apparently narrowed to 7,500yuan/mt since end-Jul. 

Spandex price may be peaked affected by limited downstream orders and the control of total amount and intensity of energy consumption. Weakening demand surrenders weaker support to spandex price. Some spandex suppliers have revised down price. Spandex market are turning to be buyers’ market. Many buyers require discounts in actual transactions. Few dealers and fabric mills start underselling spandex. Price of spandex is not expected to plunge in short run supported by low inventory and firm feedstock price. New spandex units are scheduled to gradually commission operation and stocks of spandex may not rise much in short run. Therefore, price of spandex is expected to be firm in short run but weak in long run.

https://www.ccfgroup.com/newscenter/newsview.php?Class_ID=D00000&Info_ID=2021092730047

September 27, 2021

Vita Acquisition

Manchester foam products group acquires mattress manufacturer

Acquisitions September 27 2021

Manchester private equity firm NorthEdge and The Belfield Group have completed the sale of Usleep, a specialist mattress manufacturer, to The Vita Group, the Middleton-based manufacturer of premium foam products, for an undisclosed sum.

Usleep is a subsidiary of upholstery and home furnishings manufacturer Belfield, which secured private equity investment from NorthEdge in 2016.

It provides an end-to-end service for its customers, from product design and development through to fulfilment, from two well-invested manufacturing sites in Ashton-under-Lyne and Castle Donnington.

Usleep is a zero waste to landfill business that works closely with its suppliers and customers to encourage sustainability and best-in-class business ethics.

The divestment of the Usleep subsidiary, which provides the second strong return for NorthEdge Fund II in the last quarter, follows a successful partnership between NorthEdge and Belfield.

During the partnership there has been significant investment into Usleep’s manufacturing facilties, providing capacity for growth and the capability to deliver market leading operational efficiency through semi-automated manufacturing – resulting in the business doubling EBITDA during the investment period.

Usleep serves market leading direct-to-consumer and omni-channel retailers, and continued to trade strongly throughout the COVID-19 pandemic as a result of the structural channel shift to online and the segment growth of foam and hybrid mattresses.

Vita’s acquisition of Usleep will allow the business to continue to grow its manufacturing capabilities and expand further internationally. The business will continue to be led by Paul Glynn, mattress divisional managing director, and Usleep managing director, Tina Tombs.

Gary Lasham, CEO of Belfield, said: “The backing we’ve had from NorthEdge has been excellent. They have supported the business with over £6m investment over the last four years to facilitate continued growth, including £2m to expand Usleep’s manufacturing capabilities in 2018.

“They have also driven our continuous focus on operational excellence, people and health and safety. Together we’ve built a high performing business, and we’re thrilled to have secured a new partner for Usleep that will allow the business to continue to achieve its full potential.”

Tom Rowley, director and head of Yorkshire and North East at NorthEdge, who led the Belfield MBO in 2016 alongside NorthEdge managing partner Grant Berry, said: “Usleep has consistently been a strong business in The Belfield Group. It is led by a highly experienced senior leadership team and has long standing customer and supplier relationships.

“During our partnership we have invested heavily into Usleep’s facilities, focussing on delivering operational excellence. As a result Usleep are the partner of choice for high growth omni channel and online retailers, and have the capability to continue expanding in line with increasing demand.”

Nicola McQuaid, director at NorthEdge, said: “It was vital for us to find the right partner for the next phase of Usleep’s growth.

“Vita has been supplying Usleep for some time, so they already had a strong relationship with the business and the management team, and critically recognised Usleep’s growth potential in the UK and internationally. We are looking forward to watching the business continue to grow over the coming years under Paul and Tina’s leadership.”

Paul Glynn, managing director of Usleep, said: “We’d like to thank the teams at Belfield and NorthEdge for their support over the years, and we can’t wait to see what the future holds for Usleep in partnership with Vita.”

Speaking on behalf of The Vita Group, group CEO Ian Robb said: “We are very excited to have Usleep join the Vita family. Usleep aligns with our values of safety, responsibility, resourcefulness, integrity, and innovation.

“Together, we look forward to supporting our customers and suppliers. This acquisition will enable collaboration on innovation across the end-to-end service, from unique foam technologies through to innovative mattress design.”

This will be the third acquisition completed by Vita in 2021 following the acquisitions of IMPE Srl, located in Naples, Italy, in the first quarter and UK-based Technical Foam Services in quarter two.

The Usleep acquisition significantly enhances and accelerates Vita’s strategy to grow its bedding business across Europe.

Vita has existing mattress production facilities in France, Germany, Romania, The Netherlands, UK and Hungary. Vita has long term strategic relationships with a range of global partners in the bedding sector, building on a wide range of R&D capabilities via its innovation centres in the UK (bedding) and Lithuania (chemistry/formulation).

NorthEdge and The Belfield Group were advised by Deloitte (lead advisory), Addleshaw Goddard (legal), PwC (FDD) and KPMG (tax structuring).

Vita was advised by DLA (legal), PwC (FDD, ops DD, tax), RSK (environmental DD) and Lockton (W&I broker).

www.thebusinessdesk.com/northwest/news/2086057-manchester-foam-products-group-acquires-mattress-manufacturer

September 27, 2021

Vita Acquisition

Manchester foam products group acquires mattress manufacturer

Acquisitions September 27 2021

Manchester private equity firm NorthEdge and The Belfield Group have completed the sale of Usleep, a specialist mattress manufacturer, to The Vita Group, the Middleton-based manufacturer of premium foam products, for an undisclosed sum.

Usleep is a subsidiary of upholstery and home furnishings manufacturer Belfield, which secured private equity investment from NorthEdge in 2016.

It provides an end-to-end service for its customers, from product design and development through to fulfilment, from two well-invested manufacturing sites in Ashton-under-Lyne and Castle Donnington.

Usleep is a zero waste to landfill business that works closely with its suppliers and customers to encourage sustainability and best-in-class business ethics.

The divestment of the Usleep subsidiary, which provides the second strong return for NorthEdge Fund II in the last quarter, follows a successful partnership between NorthEdge and Belfield.

During the partnership there has been significant investment into Usleep’s manufacturing facilties, providing capacity for growth and the capability to deliver market leading operational efficiency through semi-automated manufacturing – resulting in the business doubling EBITDA during the investment period.

Usleep serves market leading direct-to-consumer and omni-channel retailers, and continued to trade strongly throughout the COVID-19 pandemic as a result of the structural channel shift to online and the segment growth of foam and hybrid mattresses.

Vita’s acquisition of Usleep will allow the business to continue to grow its manufacturing capabilities and expand further internationally. The business will continue to be led by Paul Glynn, mattress divisional managing director, and Usleep managing director, Tina Tombs.

Gary Lasham, CEO of Belfield, said: “The backing we’ve had from NorthEdge has been excellent. They have supported the business with over £6m investment over the last four years to facilitate continued growth, including £2m to expand Usleep’s manufacturing capabilities in 2018.

“They have also driven our continuous focus on operational excellence, people and health and safety. Together we’ve built a high performing business, and we’re thrilled to have secured a new partner for Usleep that will allow the business to continue to achieve its full potential.”

Tom Rowley, director and head of Yorkshire and North East at NorthEdge, who led the Belfield MBO in 2016 alongside NorthEdge managing partner Grant Berry, said: “Usleep has consistently been a strong business in The Belfield Group. It is led by a highly experienced senior leadership team and has long standing customer and supplier relationships.

“During our partnership we have invested heavily into Usleep’s facilities, focussing on delivering operational excellence. As a result Usleep are the partner of choice for high growth omni channel and online retailers, and have the capability to continue expanding in line with increasing demand.”

Nicola McQuaid, director at NorthEdge, said: “It was vital for us to find the right partner for the next phase of Usleep’s growth.

“Vita has been supplying Usleep for some time, so they already had a strong relationship with the business and the management team, and critically recognised Usleep’s growth potential in the UK and internationally. We are looking forward to watching the business continue to grow over the coming years under Paul and Tina’s leadership.”

Paul Glynn, managing director of Usleep, said: “We’d like to thank the teams at Belfield and NorthEdge for their support over the years, and we can’t wait to see what the future holds for Usleep in partnership with Vita.”

Speaking on behalf of The Vita Group, group CEO Ian Robb said: “We are very excited to have Usleep join the Vita family. Usleep aligns with our values of safety, responsibility, resourcefulness, integrity, and innovation.

“Together, we look forward to supporting our customers and suppliers. This acquisition will enable collaboration on innovation across the end-to-end service, from unique foam technologies through to innovative mattress design.”

This will be the third acquisition completed by Vita in 2021 following the acquisitions of IMPE Srl, located in Naples, Italy, in the first quarter and UK-based Technical Foam Services in quarter two.

The Usleep acquisition significantly enhances and accelerates Vita’s strategy to grow its bedding business across Europe.

Vita has existing mattress production facilities in France, Germany, Romania, The Netherlands, UK and Hungary. Vita has long term strategic relationships with a range of global partners in the bedding sector, building on a wide range of R&D capabilities via its innovation centres in the UK (bedding) and Lithuania (chemistry/formulation).

NorthEdge and The Belfield Group were advised by Deloitte (lead advisory), Addleshaw Goddard (legal), PwC (FDD) and KPMG (tax structuring).

Vita was advised by DLA (legal), PwC (FDD, ops DD, tax), RSK (environmental DD) and Lockton (W&I broker).

www.thebusinessdesk.com/northwest/news/2086057-manchester-foam-products-group-acquires-mattress-manufacturer

September 27, 2021

Dual Control System

China says to firmly control energy-hungry and high-emission projects CGTN

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China’s National Development and Reform Commission issues a plan to improve the country’s “dual control system” on energy consumption and energy intensity, September 11, 2021. /CFP

China will firmly control energy-hungry and high-emission projects, the National Development and Reform Commission said in a recently issued plan, according to a notice released on Thursday. 

The plan aims to improve China’s “dual control system” on energy consumption and energy intensity, or the amount of energy consumed per unit of GDP. 

The dual control system, first set in the country’s 11th Five-Year Plan (2006-2010), has taken on added significance since Chinese President Xi Jinping in September 2020 committed the country to peaking carbon emissions by 2030 and becoming carbon neutral by 2060. 

According to the plan, China will set a five-year target of energy consumption and energy intensity for different provinces, autonomous regions and municipalities, in an effort to reasonably manage indicators of total energy consumption and energy intensity.

The plan also clarified a series of phased goals of China.

By 2025, the dual control system will be more complete, with a more reasonable allocation of energy resources and sharply improved energy utilization efficiency. 

By 2030, with a further improved dual control system, the intensity of energy consumption will continue to drop significantly, the total energy consumption be reasonably controlled and the energy structure be more optimized. 

By 2035, the optimal allocation of energy and the comprehensive conservation system of resources will be more mature and finalized, which will strongly support the achievement of the goal of steadily reducing carbon emissions after reaching the peak.

https://news.cgtn.com/news/2021-09-16/China-says-to-firmly-control-energy-hungry-and-high-emission-projects-13BHlfbRCes/index.html