Urethane Blog
Chinese Spandex Update
September 27, 2021
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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? ![]() Spandex production is anticipated to gradually ascend in Q4. ![]() 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. ![]() 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
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