SunSirs: The Boom Cycle of the Spandex Industry is Coming, and the Price Has Risen by more than 80% in the Past Six Months

Since August last year, China's domestic spandex prices have continued to soar. As of February 25, the average market price of 40D specifications was 57,000 yuan/ton, which is an increase of 84.47 compared to the lowest price in August 2020 (August 12). %. After the Spring Festival, the spandex industry started to maintain a high level of 90%, but manufacturers were tight in supply. In addition, due to increased pressure from cost support, some spandex manufacturers will temporarily not offer quotations, and new orders will not be accepted for the time being, and will be discussed separately. At present, many large spandex factories are preparing for a new round of price increases. After the Lantern Festival, the latest quotations will be released.

Raw materials have risen sharply, and cost support has not decreased

The price of upstream raw materials for spandex continues to rise. The domestic PTMEG market in spandex has accelerated since the Spring Festival. Driven by the strong increase in cost BDO, coupled with the support of PTMEG's own supply and demand, the focus of negotiations continues to rise. In the recent market negotiation game, the factory has a strong intention to raise prices. In terms of price, the mainstream price of 1800 molecular weight sources is 35000-40000 yuan/ton, and the main negotiation is 30,000-35000 yuan/ton, which is an increase of 8000-12000 yuan/ton from February 9th. . The industry start is maintained at around 80%. Specifically, the 40,000-ton plant in Yizheng Dalian is shutting down, the operating load of the 60,000-ton plant in Panjin Changchun is not high, and the 50,000-ton plant in Xinjiang Meike is operating stably and scheduled to be overhauled in March. Pure MDI traders are reluctant to sell and offer scarce prices. The current local market reference price is 27000-27500 yuan/ton in wire barrels. The industry started 7.5%, which is acceptable. Wanhua Chemical’s listing price of pure MDI barrels in March 2021 will be 28,000 yuan/ton, an increase of 4,000 yuan/ton from the previous month.

Spandex supply is tight, inventory is at a historical low in the past three years

Under the influence of the new crown epidemic, the global demand for anti-epidemic materials such as masks and protective clothing has increased significantly, and the number of downstream orders, especially foreign orders, has exploded. In the past few years, the spandex industry has expanded its restraint, which has led to a tightening of the current supply and demand balance. Since November last year, the factory has no stock of basic conventional products. Buyers are queued, and the industry's inventory is always very low. In addition, this year's national New Year policy on the spot has increased the demand for stocking by downstream factories around the Spring Festival, and has exacerbated the tight supply and demand of spandex. With the recovery of downstream logistics and the resumption of production after the Spring Festival, the export volume of spandex has also increased significantly. The inventory of most spandex factories is at a historical low level in the past three years, and the inventory level is ten to fifteen days, and some manufacturers even indicate that there is basically no inventory.

The industry boom cycle is coming, prices are expected to continue to rise in the first half of the year

At present, the high boom cycle of the spandex industry has taken shape, and the leading spandex companies have increased their production. In January this year, Xinxiang Chemical Fiber announced that it will increase by no more than 1 billion yuan for an annual output of 100,000 tons of high-quality ultra-fine spandex fibers. Phase engineering projects and supplementary working capital. Huafeng Chemical, another spandex head company, also announced in January this year that it plans to invest 4.36 billion yuan to build a 300,000 tons/year differentiated spandex project. Small and medium-sized spandex companies that are not making money have also begun to resume production. The increasing production capacity has caused the market to worry about the sustainability of the high price of spandex. SunSirs analysts believe that, judging from the current supply and demand and raw material price trends in the spandex industry, spandex prices are expected to continue to rise at least in the first half of this year. Specifically, although the start of spandex manufacturers is at a high level, some sources of goods are still very tight, and the downstream end demand areas have not yet resumed operations. In addition, the introduction of new capacity is mostly concentrated in the second half of this year, and the tight supply situation is difficult to alleviate in the short term.

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