SunSirs: Spandex Remains in Significant Oversupply with Prices Persisting at Low Levels

Since 2022, spandex prices have been on a steady decline, prompting small and medium-sized producers to exit the market while leading companies have expanded capacity against the trend. Should spandex prices remain depressed, further capacity reductions may occur by 2026, potentially steering the industry toward oligopolistic consolidation.

During a recent investor briefing, Huafeng Chemical (002064.SZ) stated that the top five spandex producers now account for approximately 80% of the industry's total capacity—a significant increase from previous years. The sector exhibits high concentration among leading players, accelerated replacement of outdated capacity, and a dual trajectory of green transformation and differentiated competition.

Despite current significant oversupply in spandex, leading companies are actively expanding capacity. Huafeng Chemical's remaining 75,000-ton spandex capacity expansion project is progressing steadily, with phased production commencement planned before the end of 2026. On January 4, Xinxiang Chemical Fiber officially commenced the first phase of its 100,000-ton functional spandex fiber project. The company anticipates that the new capacity will adopt 150-head/200-head high-density spinning technology, which is expected to yield better cost-reduction results.

Industry Polarization Intensifies

Since May 2023, calculations indicate that the spandex industry has sustained negative gross profit margins, with losses persisting for over two years.

Data indicates that China's domestic spandex prices in 2025 will continue the low-level trend observed in 2024, fluctuating at depressed levels throughout the year. Prices rose before retreating to near five-year lows. By year-end, the price of conventional 40D spandex in the East China market ranged between 22,000 and 24,500 yuan per ton, with an annual average of 23,800 yuan per ton—a 12.3% year-on-year decline.

Industry profits remain under sustained pressure, with significant divergence in profitability among spandex producers. The current trend of industry consolidation has intensified, leading to the phased exit of some outdated production capacity.

On July 31 last year, Taiguang Chemical Fiber (Changshu) Co., Ltd. announced the cessation of operations at its overseas facility in Changshu, China, with a capacity of 28,000 tons. Meanwhile, Hyosung Spandex (Jiaxing) Co., Ltd.'s production line in Jiaxing will be gradually shut down. Lianyungang Duzhong Spandex Co., Ltd.'s 30,000-ton capacity is scheduled for phase-out by August 2025.

Meanwhile, leading enterprises continue to expand capacity, with western regions emerging as the preferred location for major players. The first phase of the 30,000-ton project at Yinchuan Lycra in Suyin Industrial Park commenced operations smoothly. Hyosung Spandex's Ningxia base fully released its 142,000-ton capacity, while Taihe New Materials' Ningxia base maintained high utilization rates for its 85,000-ton capacity, achieving a remarkable 95% local raw material sourcing rate. The cluster effect in the northwest region is beginning to take shape.

In 2026, numerous spandex enterprises will continue to face significant challenges, with some potentially exiting the market. Several companies currently suffer from depleted cash flow and declining operating rates, bringing them closer to shutdown.

Leading Enterprises Focus on Differentiated Products and Scale Advantages

Amidst the industry-wide downturn, top spandex manufacturers are intensifying efforts in differentiated product segments to pursue new growth opportunities.

Domestic demand for spandex is projected to see a moderate recovery in 2025. Sustained growth in high-addition-ratio applications for sports and outdoor apparel, coupled with expanding demand from emerging sectors like medical textiles, automotive interiors, and smart wearables, will drive steady increases in differentiated spandex usage. Annual apparent consumption is estimated at approximately 1.092 million tons, representing a 14% year-on-year increase.

During a recent institutional investor briefing, Huafeng Chemical disclosed that it adjusts its product mix based on market demand, with differentiated products currently accounting for about 25% of its portfolio.

Regarding Xinxiang Chemical Fibers, sales of medical-grade and functional spandex for sportswear remain stable, with the company leading the industry in capacity utilization. In December 2025, the company announced plans to invest CNY1.22 billion in a 100,000-ton functional spandex project to further expand its high-end capacity advantage.

Regarding Taihe New Materials, public information indicates the company's spandex business is undergoing a product structure adjustment phase, with a focus on advancing into the specialty spandex sector.

Emerging application fields will become key drivers for spandex industry development. Demand in areas such as smart clothing and medical devices will continue to grow. As outdated production capacity is progressively phased out, spandex prices may rebound after fluctuating at low levels, with profits diverging (high-end products commanding higher gross margins). The industry will gradually transition from short-term supply-demand imbalances and profit pressures toward high-quality development characterized by structural optimization and balanced supply-demand dynamics. Leading enterprises will dominate the market through cost advantages and differentiated offerings.

Under current market conditions, industry leader Huafeng Chemical maintains solid profitability, while Xinxiang Chemical Fibers operates near breakeven. Most other enterprises remain unprofitable. As top players expand capacity further, their scale advantages combined with new technology adoption may drive increased industry concentration.

As an integrated internet platform providing benchmark prices, on January 12th, the benchmark price of spandex, according to SunSirs, was 23,600.00 RMB/ton, unchanged from the beginning of the month.

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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