Spandex product prices have soared, what is the logic behind the hot market?

"Since February 24, the price of all spandex specifications of the company has increased by RMB 5,000/ton to 15,000/ton

The new crown pneumonia epidemic, which has lasted for more than a year, has caused severe damage to the global textile market.

As the most widely used elastic fiber on the market, spandex is known as the "MSG" of textiles

At this stage, from international to domestic, many well-known spandex companies are stepping up their expansion plans

Many spandex companies step up production expansion

Huafeng Chemical is one of the leading enterprises in China's spandex industry.

Recently, Huafeng Chemical issued an announcement announcing that its holding subsidiary Huafeng Chongqing Spandex Co.

According to the announcement, the project will adopt a large-capacity continuous polymerization, dry spinning process route, and all adopt automatic, intelligent, energy-efficient, high-density multi-end spinning production lines

It can be found that in the future, as the new project is completed and put into production, Chongqing Huafeng's spandex production scale will increase to about 500,000 tons

"The construction of a new project with an annual output of 300,000 tons will be of great significance to the company's development

The reporter also learned that many domestic enterprises are currently implementing spandex expansion or technological transformation plans

In addition, in order to seize market opportunities, some international spandex giants have also begun to intensively expand production

New business opportunities bred under the epidemic

Since 2003, China's spandex consumption has shown a strong growth momentum, with an average annual compound growth rate exceeding 10%

Statistics from the China Chemical Fiber Industry Association show that in 2019, China's spandex output was 727,000 tons, an increase of 42% compared to 2015

It is especially worth noting that since 2020, affected by the new crown pneumonia epidemic, the spandex market has ushered in a new round of development opportunities

On the one hand, in the first half of 2020, masks have become a key material for epidemic prevention and control, and spandex filament is an important raw material for the production of mask earbands

On the other hand, affected by the epidemic, global consumers' consumption preferences for apparel products have changed

A relevant person in charge of a spandex enterprise in Jiangsu and Zhejiang told reporters: "The epidemic has changed everyone's life>
.
The rise of indoor sports has increased the market's demand for yoga clothing, sportswear and other products, and these clothing generally contain high spandex content.
This has led to an increase in the demand for spandex
.
In addition, the epidemic has a greater impact on foreign countries, which has caused many textile orders to return to China, and indirectly driven the growth of spandex demand to a certain extent
.
"

Affected by the above factors, although the epidemic has caused severe damage to the global textile market, it has ignited spandex on the whole, driving the rapid growth of spandex market demand
.
This can be reflected in the performance of listed companies
.

Huafeng Chemical’s recent 2020 performance forecast shows that during the period, the company’s net profit attributable to shareholders of listed companies is expected to increase by 8.
61% to 35.
76% year-on-year
.
Huafeng Chemical said that in 2020, the company's new spandex production capacity will be released smoothly; with the effective control of the epidemic and the recovery of downstream demand, the company's production and operation have shown a good development trend, and spandex production and sales have increased significantly compared with the previous year
.
At the same time, the company digs deep into internal management efficiency, improves quality and efficiency, and the unit cost of major products has decreased compared with the same period of the previous year, which has led to an increase in overall gross profit margin
.

Xinxiang Chemical Fiber is also one of the well-known spandex manufacturers in China.
Its annual spandex production capacity is currently 120,000 tons, and a new spandex production capacity of 100,000 tons is still under construction
.
Especially since the second quarter of 2020, as the demand for spandex products such as mask earbands and protective clothing has increased significantly, the company's spandex product revenue has achieved substantial growth
.

Public announcement data shows that in the second, third, and fourth quarters of 2020, Xinxiang Chemical Fiber's spandex business revenue increased by 31.
58%, 28.
02%, and 63.
79% year-on-year, respectively
.
Among them, the second and third quarters were mainly reflected in the increase in sales of spandex products.
In the fourth quarter, both sales and unit prices rose
.

“The market for spandex was hot in the fourth quarter of last year, mainly because downstream weaving manufacturers had to prepare in advance for the production of spring and summer fabrics
this year
.
The price has risen by more than 80%
.
" An industry insider introduced
.

From the overall situation of the industry, according to the National Bureau of Statistics, from January to November 2020, China's spandex output was approximately 754,000 tons, an increase of 5.
58% year-on-year, accounting for approximately 1.
48% of China's total synthetic fiber output during the same period
.

A previous report issued by a global research and consulting company also predicts that in the next few years, the demand for spandex in the global market will maintain an annual growth rate of 9%
.

From the perspective of the overall development trend of the spandex industry, green and intelligent will be the two important development directions in the future.
At the same time, differentiated and functional products, such as spandex for sanitary ware, dyeable spandex, and ultra Comfortable spandex, etc.
will be promising
.
"China's spandex industry is currently expanding rapidly on the one hand, and on the other hand, it is also at a critical stage of industrial upgrading and high-quality development
.
For example, Huafeng Chemical has launched green and environmentally friendly regenerated spandex and bio-based spandex in the past two years, and has established a presence in Chongqing The plan to greatly increase the degree of automation and informationization in the new project is actually an important reflection of the future development direction of the spandex industry
.
" Said the industry insider
.