Rising, rising, rising. Recently, textile people’s circle of friends has been flooded with news about “price increases”. The “protagonists” of this wave of price increases are mainly various types of chemical fiber filaments, among which “spandex” is the “protagonist” among the “protagonists”.
July On the 6th, the mainstream reference quotation of spandex 40D in Zhejiang was 72,000-75,000 yuan/ton, an increase of 2,000-3,000 yuan/ton from a week ago. In September 2020, this price was only 29,000 yuan/ton. Looking at spandex 20D, the current quotation has also risen to 90,000-95,000 yuan/ton, an increase of 86% since the beginning of this year, and an increase of more than 150% compared with the same period last year.
The increase is so high that it is clear at a glance.
It is reported that the current operating rate of the major spandex factories exceeds 90%, and the inventory level are at historically low levels.
Outstanding performance prompts expansion of production capacity
In the context of a good market, the performance of spandex manufacturers is naturally very impressive.
One of the leading domestic spandex companies, Taihe New The company announced its semi-annual performance forecast on the evening of July 6. The company expects to achieve a net profit attributable to shareholders of listed companies in the first half of 2021 of 400 million to 450 million yuan, a year-on-year increase of 222.45% to 262.76%. The announcement stated that since the beginning of this year, demand in the spandex industry has continued to be strong, production capacity concentration has increased significantly, spandex sales prices have continued to rise, and profitability has increased significantly year-on-year.
The performance is outstanding, and both production and sales are booming, which has promoted the company’s expansion of production. Huafeng Chemical stated on the investor interactive platform on June 27 that it will raise no more than 5 billion yuan in non-public funds, and plans to invest all of it in the 300,000 tons/year differentiated spandex expansion project and the 1.15 million tons/year adipic acid expansion project. (six issues). Huafeng Chemical said: As the price of spandex rises, the company’s shipments increase, the company’s profits are guaranteed, and the company far surpasses its peers in energy, depreciation, labor, equipment, raw material transportation, etc., with significant cost advantages. In the future, with 300,000 tons With the gradual commissioning of the expansion project, the company will further strengthen its cost moat. Moreover, according to Huafeng Chemical’s plan, with the completion of the second phase of Chongqing’s 100,000 tons/year differentiated spandex project and the Chongqing 300,000 tons/year differentiated spandex project, the company’s production capacity will exceed 500,000 tons, and the output is expected to reach 60,000 tons. million tons, and is expected to surpass Hyosung and become the world’s largest spandex producer.
Will the “good old days” of spandex continue?
It must be noted that the current supply and demand in the spandex industry is still very tight, and industry inventories continue to It remains at the lowest level for 12-14 days, so it is expected that spandex manufacturers will increase their quotations. So what does the second half of the year hold?
The price of spandex is so hot. In addition to the sharp increase in international oil prices, the cost of spandex has also increased. In addition, an important reason is that downstream terminal demand is gradually increasing. Professor Jiang Gaoming of Jiangnan University said during the “Fiber Air Lecture”: “At present, about 35% to 40% of clothing in the downstream clothing field contains different proportions of spandex. Spandex has been used in traditional application areas such as elastic stockings and underwear. It has gradually expanded to high-end elastic casual wear, knitted outerwear and other fashionable clothing. At the same time, industrial spandex such as medical spandex, elastic decorative fabrics and elastic bands have gradually become new areas of spandex application.”
In this regard, Jiang Gaoming gave an example: “For example, for molded elastic uppers, 20~70D spandex is added in the form of covered yarn or bare silk. , making the upper fit your feet better, allowing you to move freely without restraint, and make it more comfortable to wear; it effectively reduces shoemaking processes such as sewing and fitting, and reduces labor; last year, the global annual sales volume of knitted sports shoes was approximately 8 billion pairs, with an output value of 100 billion , accounting for more than 50% of the entire footwear category, the market is increasing steadily.
In addition In addition to swimwear, leggings, knitted elastic denim, casual suit fabrics, sports compression socks, sports knee pads, air layer fabrics, etc., the application fields of spandex are constantly expanding, and the growth of downstream demand is showing new characteristics. According to market research companies Slice Intelligence tracked online shopping data and found that in the third quarter of 2020, the number of leggings purchased online by women exceeded jeans for the first time. Last year, the market demand for leggings increased by 41%, while jeans only increased by 3%. From 2015 to 2019, the Chinese market The demand for varicose vein socks has increased from 1.79 million pairs to 4.96 million pairs, with the growth rate maintaining between 13.7% and 18.9%, and the market size is about 3 billion yuan. These emerging areas have stimulated the growth of spandex demand.
Spandex will rise in the short term Prices have limited impact on fabric orders
But surprisingly, prices are rising everywhere of spandex is rarely reflected in downstream stretch fabrics. It seems that changes in spandex prices have a limited impact on fabrics.
“��Normally speaking, if the price of raw materials changes by 500 yuan/ton, our fabric prices will have to be adjusted accordingly. However, the price of spandex has increased so many times this year that we did not make a slight increase until this week. Some fabrics increased by 0.1 yuan/meter, and some increased by 0.1 yuan/meter. Only a few cents left. And once the price of spandex drops later, we will immediately lower the price. “A person in charge of a weaving company said.
Although they have recently raised fabric prices operations, but all of them reveal that there is great pressure to increase the price of elastic fabrics. Isn’t it said that the demand for good elastic fabrics is strong, why is it so difficult to increase the price of fabrics? In fact, there are indeed many orders for elastic fabrics in the textile market. According to the company responsible According to people, they produce many types of fabric products, but only a few stretch fabrics are really popular. Basically, the entire company’s hope is in stretch fabrics, so if it can maintain basic profits, it does not dare to rush Price increases, worrying about the loss of customers and orders due to price increases.
In the market Customers with small orders are also highly mobile, so they often shop around and choose the weaving factory with the lowest price to get the goods. Customers with large orders often choose strong weavers due to the large quantity, and it is difficult for small factories to get the goods. A piece of the pie, and these big customers have negotiated prices and signed contracts in advance, so there is basically no hope of fabric price increases later.
In other words, the impact of rising spandex prices on fabric orders in the short term is indeed limited, but with the end of the off-season and the arrival of the peak season, the price impact of spandex will still gradually increase.
Supply constraints are still inevitable
The price of spandex may reach a new high in the third quarter
Spandex will rise this year The price momentum is so strong mainly because the growth rate of spandex production capacity is lower than the growth rate of terminal demand. Spandex production capacity increased from 165,000 tons in 2004 to 786,300 tons in 2018; by 2019, China’s spandex production capacity reached 850,000 tons. A year-on-year increase of 8.1%; last year, China’s spandex production in 2020 was 872,000 tons, an increase of only 22,000 tons, a year-on-year increase of 2.59%.
In recent years, China’s apparent consumption of spandex has increased year by year, reaching 681,000 tons in 2019. China’s apparent demand for spandex will increase to 782,900 tons in 2020, a year-on-year increase of 14.97%. In addition Spandex exports have also affected domestic spandex supply. According to statistics, China’s spandex exports in 2019 were 74,000 tons, a year-on-year increase of 28.2%; in 2020, China’s spandex exports were 78,500 tons, a year-on-year increase of 6.08%.
The 2.59% increase on the supply side is comparable to the 14.97% increase on the demand side and 6.08% on the export side. Than being stretched thin. A situation of “supply exceeds demand” is forming, and spandex price increases are inevitable. Although a lot of production capacity is already under construction, the latest production will have to wait until the end of November this year. The current supply shortage of spandex is still unavoidable. Especially in the peak season in the second half of the year, it is inevitable that the price of spandex will rise, and the fabric will follow suit. Even if new production capacity is put into operation by the end of the year, it may be difficult to meet the new terminal demand. According to market analysis, spandex prices will hit a new high in the third quarter.