SunSirs: Costs Remained Firm, and Spandex Prices Slightly Increased in August

Price trend

Amidst the continuous high costs, the spandex market saw a slight price increase in August. According to the Commodity Market Analysis System of SunSirs, as of August 29th, the price of 40D spandex was 33,625 RMB/ton, an increase of 0.37% compared to the beginning of the month. As of August 29, news of price increases in the spandex industry was fluctuating, the overall industry operating was at around 72%, and the cost side remained strong.

Analysis review

The raw material pure MDI factory controlled the quantity of shipments, and the spot market was still tight. The overall strong atmosphere still existed. The mainstream offer for Shanghai goods was 22,200-22,500 RMB/ton. The molecular weight 1800 of PTMEG was quoted at 20,000 RMB/ton, and there were phenomena of shutdown maintenance and load reduction in the factory. The overall operating rate of the industry was around 68%.

The downstream startup rate was stable and slightly warmer, with mainstream textile enterprises in China having a startup load of over 70% as of the end of August. However, as of August 29, there was a shortage of new orders received by the factory, and mainly small and scattered orders, and due to high raw material prices, profits were mostly in a loss state.

From the perspective of the textile industry, the foreign trade situation remained severe, and textile and clothing exports continued to be hindered. In July 2023, China's textile and clothing exports totaled 27.115 billion US dollars, a year-on-year decrease of 18.38%. For the third consecutive month, the trend of decline continued to expand, with textile exports reaching 11.154 billion US dollars, a decrease of 3.57% compared to the previous month. From January to July, the cumulative export of textile and clothing reached 169.79 billion US dollars, a year-on-year decrease of 10%.

Market outlook

Analysts from SunSirs believe that as of August 29, the positive factors for raw materials still existed, which would provide positive support for spandex. With the arrival of the traditional peak season of the "Golden September and Silver October" textile industry, it is currently in a stage of transition from the off-season to the peak season, and the market purchase and sales will enter a preheating stage. Although orders have improved compared to the previous period, they are still average compared to previous years, and the overall wait-and-see sentiment is relatively strong. Under cost pressure, it is expected that the spandex market will continue to slightly increase prices in September.

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