Spandex price increases sporadically and slightly after the Spring Festival holiday

Before and after the Spring Festival, the spandex market continues to call for price increases. A small number of suppliers have raised the price of spandex by 1,000yuan/mt. However, due to multiple reasons, the actual market increase remains slow, with most sales occurring at original prices. The market price shows signs of stabilizing after a decline, with some tight varieties experiencing slight price increases.

Historically, the price of spandex was at a record low before the festival and continued this trend afterward. The mainstream price for 40D is in the range of 23,000 to 25,000yuan/mt, higher for some medium-to-high end sources and lower for some stagnated goods. Fabric mills and agents have been bottom-fishing based on demand, with some stocking up for 15-30 days, while a few agents are preparing for up to 45 days based on their needs. However, some buyers continue to follow just-in-time purchasing, cautious in restocking; there are still divergent sentiments in the downstream market.

Before and after the Spring Festival, the production reduction of downstream weaving mills has been significant, running at low capacity. It is expected that the operating rate will accelerate rising after the Lantern Festival (Feb 12), with an increase in demand for essential supplies. Although the inventory of spandex suppliers has decreased post-festival, it remains relatively high, with post-festival inventory peaking at 55 days and currently falling to 47 days. Aside from a few brands, there is still considerable pressure on spandex sales, with many customers purchasing at original prices. After the price increase, trading volume of a few brands has been low, primarily executing pre-sale orders before the festival, with slight price increases for some small orders and tight varieties. Suppliers lack confidence in raising prices, and some have not even informed customers about potential price increases due to high inventory pressure.

As for the supply of the spandex industry, there will be a noticeable increase in supply moving forward, coming from two parts: one part is the release of new capacity in the first half of the year; the other part is the restart of units that were halted before the Spring Festival. Supply capacity is expected to increase significantly.

Regarding the installation progress of new spandex units, it is anticipated that the new capacity will be 159,000 tons in the first half of 2025, with some early-starting facilities expected to begin operations in March, gradually ramping up based on market conditions.

Additionally, facilities that were halted before the Spring Festival will gradually resume operation. Currently, the operating rate of spandex plants has increased by two percentage points to 77% compared to the previous low period, with that of companies with capacity at 80kt/year or above up to 84% and that of small-and-medium sized enterprises up to 51%. It is expected that in late-February and March, an additional 100,000 tons of facilities will restart, involving multiple units from seven spandex factories, with operating rate likely to rebound to around 85%.

The prices of PTMEG and BDO are expected to be weak-but-stable when supply exceeds demand. Although there are expectations for a traditional peak season in downstream market, the overall recovery has been slow this year. Some spandex suppliers, under pressure from losses, have raised prices by 1,000yuan/mt, but with high inventory and insufficient domestic orders, it is expected that spandex prices may stabilize in the short term. Price fluctuations are likely to be minimal, with mainstream sales under stable price, while the price increases for some tight varieties may expand to 500-1,000yuan/mt, and the discounts on previously low-priced sources may be canceled.