From 28,000 yuan/ton half a year ago to 46,000 yuan/ton now, the price of spandex has been on an elevator.
The price of spandex 40D was 28,000 yuan per ton in early August last year, and the price has soared to 46,000 yuan per ton in half a year. .
On February 19, the spandex market price in Jiangsu and Zhejiang regions was adjusted again, and the supply was still tight. At present, the quotations for 20D specifications in Zhejiang are 56,000-60,000 yuan/ton, the quotations for 30D specifications are 54,000-58,000 yuan/ton, and the quotations for 40D specifications are 46,000-50,000 yuan/ton. Spandex prices have increased by 20% this year, and the cumulative increase since the low point in August last year has been as high as 78%.
Why has spandex become the most popular product?
Spandex, also known as polyurethane elastic fiber, is a high elastic fiber with high elongation, It has the characteristics of good fatigue resistance and good dyeability, and is widely used in textiles and clothing. At present, the global spandex production capacity is mainly in my country. According to data, the production capacity of the domestic spandex industry has climbed from about 480,000 tons/year in 2012 to about 850,000 tons/year in 2019, with an average annual compound growth rate of 8.59%. The new production capacity is mainly concentrated in large and medium-sized spandex manufacturers, and industry concentration continues to increase.
At present, the main leading domestic spandex companies are Huafeng Spandex, Xinxiang Chemical Fiber, Huahai Spandex, Taihe New Materials, etc. The combined production capacity of these companies can account for half of the country.
Zheshang Securities believes in the latest research report that the pressured demand for textile clothing will improve in 2020, and chemical fiber export orders will continue to increase. The export volume of spandex has increased significantly year-on-year for five consecutive months, and domestic leading companies are expected to gain more international market share.
Industry leaders are rapidly expanding production capacity
Recently, listed companies that produce spandex have also made frequent moves , increase production capacity.
1. Huafeng Chemical: Plans to add 300,000 tons of differentiated spandex production capacity within 6 years
Recently, Huafeng Chemical, the largest leading spandex company in China, announced that it plans to invest 4.36 billion yuan in a new 300,000 tons/year differentiated spandex project within 6 years.
It is understood that the company currently has 185,000 tons of spandex production capacity, and 40,000 tons of production capacity in Chongqing is expected to be put into production at the end of this year. If the company plans to add 300,000 tons/year in six years, the difference Chemical spandex, the company’s spandex production capacity will exceed 500,000 tons/year in the future, and the company’s spandex cost advantage will be further highlighted.
According to calculations by Zheshang Securities, the investment per ton of the 300,000 tons/year spandex project is 14,500 yuan, which is higher than the investment per ton of the 60,000 tons/year spandex project in Chongqing (the investment per ton is 33,300 yuan) project decreased by 56.5%. At the same time, the company gradually increases the proportion of differentiated spandex, and the profit margin will be further improved.
Previously, the company released its 2020 performance forecast. The company estimated that the net profit attributable to the parent company last year would be 2 billion yuan to 2.5 billion yuan, a year-on-year increase of 8.6% to 35.8%. Among them, the net profit attributable to the parent company in the fourth quarter was 759 million yuan to 1.259 billion yuan, a sharp increase of 31.8% to 65.9% from the previous quarter. The company said that its fourth-quarter results far exceeded expectations mainly because the volume and price of its main products spandex and adipic acid increased. Recently, the company said during a survey by the reception organization that the company is currently at full production and inventory is low. The second phase of the company’s 100,000-ton differentiated spandex project is under construction and is expected to be put into production before the end of this year.
2. Xinxiang Chemical Fiber: Wants to increase production capacity of high-quality ultra-fine denier spandex fiber by 100,000 tons/year
Recently, Xinxiang Chemical Fiber released the “2020 Non-public Issuance of Stock Plan” (Second Revised Draft). The company plans to raise no more than 991 million yuan in non-public funds, which will mainly be used to invest in the construction of the first phase of a high-quality ultra-fine denier spandex fiber project with an annual output of 100,000 tons and to supplement working capital. The company stated that the implementation of the investment project with raised funds will optimize the company’s existing product structure, strengthen the development strategy of spandex products, and increase the company’s market share and comprehensive competitive strength in the spandex industry.
Source: Xinxiang Chemical Fiber Announcement
On February 5, Xinxiang Chemical Fiber, together with relevant intermediaries In the reply to the China Securities Regulatory Commission’s “Notification Letter” about this non-public issuance, the company’s spandex sales in 2020 were specifically mentioned.
According to the announcement, in the last three quarters of 2020, the company’s spandex business revenue achieved year-on-year growth of 31.58%, 28.02%, and 63.79% respectively, of which revenue in the fourth quarter increased significantly year-on-year. The growth was mainly due to the increase in sales volume and unit price.
It is understood that the company’s spandex products are currently in short supply and the sales of spandex products are good.
3. Taihe New Materials: 45,000 tons of new production capacity is expected to be put into production around the end of the year
Taihe New Materials It is the first spandex manufacturer in China. At the end of last year, the company stated in a survey by institutional investors that it currently has a spandex production capacity of 45,000 tons.in relocation status. The Ningxia base has 30,000 tons of spandex (72.5% equity). Currently, Yantai has a production capacity of 15,000 tons and Ningxia has a production capacity of 40,000 tons, both of which will be put into production around the end of 2021.
The company stated that its current inventory of spandex is very low. Coarse-denier spandex has a competitive advantage and its price is higher than conventional varieties.
Downstream textile demand continues to drive
Spandex will maintain its prosperity for a long time
“As far as I know, the inventories of peers are now very low, and the supply of products exceeds demand.” The person in charge of a listed company that produces spandex told reporters. Recently, many institutions have predicted that spandex will maintain its prosperity for a long time, driven by the continued demand for downstream textiles.
The spandex market is strong and upward before the Spring Festival. The upstream raw material market fluctuates and rises, and cost support pressure increases. International crude oil prices have continued to rise recently, with Brent crude oil prices rising to US$62 per barrel, which has returned to the level before the outbreak of the new crown epidemic. The upstream BDO market surged by 31% in more than 20 days, and the downstream PTMEG-spandex industry chain performed well. Boosted by cost support, the spandex market fluctuated strongly after the holiday. At present, the operating rate of the spandex industry is 90%, and the average inventory in the industry is about 15 days, with some individuals being as low as less than 20, which has fallen to a multi-year low.
On the supply side, the spandex industry has an obvious oligopoly pattern, and new production capacity will be limited in 2021. Only Chongqing Huafeng is expected to have 40,000 tons of new production capacity in June, with a production capacity increase of only 4.5%. .
In terms of demand, as the domestic epidemic situation has stabilized, the spandex market demand has recovered rapidly. With the end of the Spring Festival, the operating rate of downstream circular knitting machines and warp knitting industries will be higher than that of a year ago. If there is further improvement, demand is expected to increase further. </p
