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Spandex prices decline to a half in H1 2022

  

In the first half of 2022, demand for spandex declined while supply soared. This led to Spandex price declining to a half of the 2021 levels. As per a CCF Group report, stocks of spandex 40D worsened due to rise in spot raw material prices from Q2, which reached historic highs in end-Q2.

Inventory surged to 45 days by end-June, even near two months in some factories. The expanding of capacities by companies led to overall inventory of spandex hitting a historic high. Orders for downstream fabric mills declined in late-June leading to a further decline in prices of polyester fiber, nylon fiber, spandex, cotton and cotton yarn. Some fabric mills increased cutting or suspending production.

The operating rate of spandex plants declined to 82 per cent by end-Jun. Plants with 70kt/year of capacity or above ran at around 87 per cent of capacity, those with 30-40kt/year of capacity ran at around 75 per cent of capacity and that of small factories with capacity at 200kt/year or below ran at around 40 per cent of capacity. Spandex factories in Middle and West China ran at above 90 per cent of capacity and that of units in East China ran at around 70 per cent of capacity with pressure from losses.

In July, spandex production is likely to be cut further due to soft demand and more losses. More spandex plants in East China are expected to reduce or suspend production in July. This will cause the operating rate of spandex plants to fall by around 10 percentage points to below 75 per cent during the month.

 
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