Big events of spandex industry in 2021

World economy was recovering in 2021. Demand for textiles and apparels which was constrained before revived. In post-pandemic era, customers preferred casual fabric and sports fabric with higher comfort and stronger elasticity. Demand for spandex from pandemic prevention materials remained high. Improving demand rendered spandex industrial chain to keep prosperous in 2021. Bolstered by soaring profit, capacity of BDO-PTMEG-spandex apparently expanded. The followings were some major events noteworthy.

Macro market

1. RCEP

On December 17th, the Regional Comprehensive Economic Partnership Agreement (RCEP) would enter into force on January 1, 2022, mainly involving six ASEAN members, including Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam, and four non-ASEAN members, including China, Japan, New Zealand and Australia. The specific tariff of spandex industrial chain can be found from Brief analysis of tariff change of spandex products on RCEP

2. Dual Control of energy consumption

On Aug 17, 2021, the National Development and Reform Commission, China's top economic planning body, rarely and directly pointed out that the energy consumption intensity of 9 provinces and autonomous regions increased instead of decreasing in the first half of the year compared with the same period last year. In addition, the reduction rate of energy consumption intensity of 10 provinces did not meet the progress requirements. It meant that more than half of the provinces failed to achieve the goal of controlling energy consumption and intensity in the first half of the year. The actions in various localities against the goal of controlling energy consumption and intensity, so-called "Double Control", began to arouse general concern in society.

The operating rate of spandex plants and downstream fabric mills was impacted by the Dual Control in end-Q3 and early-Q4. Coupled with weaker market atmosphere, the run rate reduced further in the fourth quarter.

Upstream market

1. Wanhua Chemical invested 100kt/year of BDO project in Sichuan

In January, Wanhua Chemical planned to build 100kt/year of BDO capacity and integrated with natural gas based acetylene and formaldehyde industry chain in Meizhou, Sichuan. According to the description in the environmental impact assessment, Wanhua invested in the BDO project mainly to provide raw materials for the 60kt/year of PBAT project in Sichuan.

2. Yanchang's PTMEG project with recycling associated gas resources started operation

In mid-May, good news came from the Yanchang Petroleum: The polytetrahydrofuran unit (PTMEG), a project for the recycling of associated gas resources in Yanchang Petroleum, opened the whole process and successfully realized independent commissioning and put into production for the first time, completing the trial production 17 days ahead of schedule. So far, all the four qualified main products produced by the company have come out.

3. Inner Mongolia Dongjing added another 200kt/year unit

In November 2021, the Inner Mongolia Dongjing Bio-Environmental Protection Technology Co., Ltd., which was contracted by Beijing Petrochemical Engineering Co., Ltd., held a special work meeting on the design closure of the 200kt/year of 1pyr4-butanediol (BDO) project. The project is contracted by Beijing Petrochemical Engineering Co., Ltd. and is located in Wuda Industrial Park, Wuhai City, Inner Mongolia. Making use of the advantages of local resources such as lime, electric power and coal, the project adopts the continuous production process of Hong Kong Guanda Co., Ltd., with a total investment of 2.94 billion yuan. It is scheduled to be completed and put into production in 2022. After the completion of the project, Dongyuan Science and Technology's BDO capacity will reach 400kt/year, with annual output value at 13 billion yuan. Dongyuan will become green, low-carbon, recycling integrated BDO industrial base, and also help enterprises to form the layout advantages of biodegradable plastic industry chain.

4. Hyosung Ningxia's PTMEG project started production

Hyosung Chemical's PTMEG project with 50kt/year of capacity in Ningxia comissioned operation in December 2021.

Spandex market

1. Huafon Chemical announces to invest and establish 300kt/year of differential spandex project

Huafon Chemical Fiber Co., Ltd. put forward to invest and build 300kt/year of differential spandex project by its subordinated company Huafon Chongqing Spandex Co., Ltd. The total amount of project income and investment in the payback period was 4.36 billion yuan, which will take 6 years with three phases (50kt+150kt+100kt).

1. Aoshen participates in the jointly release of "2021 Joint Declaration on Social Responsibility of the Antibacterial Industry”.

In February, in the face of the continuous spread and worsening of the pandemic, Aoshen Spandex participated in the joint release of the“2021 Joint Declaration on Social Responsibility of the Antibacterial Industry”.

3. Xinxiang Chemical Fiber plans to invest and build new spandex project with 1 billion Yuan

In March, Xinxiang Chemical Fiber planned to implement 100kt high-quality super-fine spandex Phase II project. This phase II project produced super-fine spandex, with annual production at 30kt and located in Xinxiang Economic and Development Zone. It was scheduled to start construction in Q2 2021 and would take 18 months before completed. The total investment was at 1.018 billion Yuan, including 962.70 million yuan of construction investment, 14.7 million Yuan of financial fees during construction and 40.60 million Yuan of working capital.

4. Lycra cooperates with HeiQ

Lycra and HeiQ, leaders in textile technology innovation, announced that they have established extensive partnerships on multiple technology and brand platforms, which are expected to bring more high-quality and sustainable innovative textile technologies to consumers around the world.

5. Huafon successfully releases Zhejiang manufacturing standard of "Colored Spandex Filament"

The Zhejiang manufacturing standard "Colored Spandex Filament" T/ZZB 2535-2021, which was formulated by Huafon Chemical Co., Ltd in November, has been officially released and implemented. This is the second Zhejiang manufacturing standard formulated by Huafon Chemical Company after the release of "Chloro-resistant Spandex Filament". The standard puts forward more stringent requirements for the production and inspection of colored spandex filaments from the aspects of excellent quality, independent innovation, industrial coordination and social responsibility, improves the manufacturing standards of the industry, and expands the brand effect of "Made in Zhejiang".

6. Hyosung Ningxia's Phase I spandex project put into production in Ningdong

On December 22, the first phase of Hyosung Spandex, the largest foreign investment project in Ningxia, was completed and put into production, which took only 280 days from March 18 to put into production, refreshing the fastest speed of spandex industry construction and marking a new step in the industrial transformation and upgrading of Ningdong base.