Q1 spandex market review and later market outlook

In the first quarter of 2025, the spandex industry was at a historical low and experiencing price fluctuations and adjustments. Profitability varied significantly among different brands, with the average capacity utilization at its lowest in nearly nine quarters. However, with the increase in downstream facilities including covered yarn, circular knitting, warp knitting and lace-making, along with spandex prices being at historically low, there was a growing demand for fabric comfort. Supported by diverse market needs in yoga, outdoor activities, lingerie, casual wear, men's clothing and home textiles, the demand for spandex continued to see moderate growth.

Prices: increased at first but then fell in Q1

In the first quarter of 2025, the average prices for spandex 20D, 30D and 40D were 27,602yuan/mt, 26,602 yuan/mt and 24,102 yuan/mt, respectively, marking year-on-year declines of 14.8%, 15.3% and 15.1%. The average quarterly price of spandex has hit a new

historical low, and the price gap between 20D and 40D further narrowed slightly. The highest prices in the first quarter were seen in the second half of February through the first half of March, with prices returning to levels before the Spring Festival holiday by the end of March.

Supply: capacity Increased and operating rate inched down

By the end of March 2025, the spandex capacity in Chinese mainland was adjusted up by 66,000 tons to 1.4205 million tons/year, a 4.7% increase compared to the end of the fourth quarter last year and a 9.7% year-on-year increase. In the first quarter of 2025, the operating rate of spandex industry showed a trend of first declining and then slowly increasing, with an average of 78.8% in the first quarter, the lowest average in nearly nine quarters. This represented a decrease of 3 percentage points compared to the fourth quarter of 2024 and a year-on-year reduction of 2.5 percentage points.

In terms of inventory, some spandex plants raised price before the Spring Festival in 2025. There was peak-season anticipation after holiday, and some export orders were expedited. In addition, many spandex plants cut or suspended production with heavy losses. As a result, the average inventory of spandex was at 49.1 days in the first quarter, a decrease of 4 days from the previous quarter but an increase of 11 days year-on-year.

Profitability: Cash flow for spandex 40D above 1,000yuan/mt

In the first quarter of 2025, the costs of the main raw materials necessary for spandex production showed a downward trend. The prices of spandex maintained a range of fluctuations during the first quarter. The cash flow for spandex 40D exhibited a trend of gradual increase, with the average quarterly cash flow for spandex 40D at 1,233yuan/mt, a 20% decline compared to the previous quarter and a 22% decline year-on-year. The price of spandex remained at a historical low level in the first quarter. After a weak rebound in February, the price slightly retreated by the end of March, though the average price in March still remained at the quarter's high point. Due to the significant expansion of PTMEG capacity, the price remained under downward pressure, whereas the price of MMDI increased at first and then dropped. The gradual decrease in costs and the steady increase in spandex prices have pushed the cash flow for spandex 40D marginally higher during the quarter.

Market outlook

In 2025, the global macro environment faces multiple challenges and uncertainties, including geopolitical conflicts, escalating trade wars, debt issues, inflationary pressures, and the impact of technological advancements on employment. In this unfavorable environment, the spandex industry faces both challenges and opportunities. In the short term, pressures include the concentrated release of capacity, a more pronounced trend of industry winners and losers, and significant difficulties in exports to the U.S. in the second quarter. However, the industry concentration is gradually increasing, and there is a notable head effect for leading companies. Furthermore, with the evolution of consumer attitudes and upgraded consumer demand, the differentiation of spandex functionalities continues to enrich, and downstream applications keep expanding. The penetration rate of spandex in textile products is expected to increase further, with applications in differentiated fields, such as medical materials and automotive sectors, on the rise. It is expected that the anticipated growth in spandex demand for 2025 may narrow, but could still approach a double-digit growth rate. Against the backdrop of significant losses throughout the entire industry chain (BDO-PTMEG-spandex), it is estimated that the spandex industry will be near the historical bottom, with a narrow range for price declines. The price promotion is likely to increase in Q2 after the inventory accumulates.