For the first half of 2018, spandex supply in China significantly outstripped demand. Spandex was purchased on demand, and inventory of several weavers and dealers slightly went up. Spandex prices continuously dropped, but prices of MMDI, one of the main feedstocks for spandex, increased by around 20 per cent year on year. PTMEG prices slightly declined year on year, while overall feedstock cost was higher than the same period of last year. Cash flow of spandex 40D deteriorated slightly year on year, while several brands with low financial costs, efficient units and differentiated products showed meager profits. The concentration ratio of the spandex industry is expected to gradually rise in the next few years.

Compared with the great volatility in the past two years, the inventory fluctuation of spandex industry was slight in 2018. Spandex plants focused on selling, while the operating rate of downstream weaving plants was higher than in the previous two years. Downstream buyers purchased spandex mainly to cover the pressing demand this year, and spandex inventory slowly increased. The monthly sales ratio was largely balanced.

The operating rate of the spandex industry was mainly above 90 per cent entering the third quarter. The operating rate of spandex downstream weaving plants was 30 per cent to 70 per cent.