The spandex market in China set a new high in the third quarter of this year. The domestic price of 20D Spandex reached 117,524.90 yuan per metric ton during the quarter due to a high market demand and tight supply. It was 49,214.29 yuan per metric ton in January 2021, which increased substantially by 70.20 per cent to 83,761.90 yuan per metric ton in May 2021 over the price in January.
The net profit of Huafon Chemical surged by 295.0 per cent to 2.28 per cent over the same period last year. As per a CCF Group report, the company is engaged in the R&D, production and sales of polyurethane products such as spandex fiber, polyurethane solution, adipic acid and so on. In the first three quarters of 2021, the company’s net profit attributed to shareholders of listed companies surged by 393.6 per cent to 6.13 billion yuan over the same period last year.
Similarly, the net profit Xinxiang Chemical Fiber attributed to shareholders in the third quarter improved significantly to 492-562 million yuan. The company had registered a loss of 3.09 billion during the third quarter of last year. It expects to achieve a net profit of 5, 022 per cent amounting to 1.23-1.3 billion yuan from January to September.
Manufacturer of para-aramid and m -aramid besides spandex, Tayho New Materials’ net profit attributed to shareholders of listed companies increased by 398.7 per cent to 290 million yuan in the third quarter of this year. During the first three quarters of the year, the company’s operating income increased by 94.77 per cent to 3.28 billion over the same period last year while its net profit belonging to shareholders of listed companies increased by 301 per cent to 731 million yuan
Sports and athleisure wear demand boosts prices
Outpacing other raw materials of textiles and apparels, spandex prices rose sharply in 2021. The prices of 20D, 30D and 40D varieties of spandex rose by 122 per cent, 98 per cent and 106 per cent respectively in Q1-Q3, 2021. On a year-on-year basis, its surged 83.1 per cent, 137.7 per cent and 183.1 per cent respectively. Growth was mainly driven by a strong demand for sportswear, yoga clothes, sun-proof apparels and sport underwear.
Demand from mask and protective clothes also surged during the period. In addition, sales of dralon fabrics, fabric for thermal leggings and super-soft fabrics rose exponentially. The mismatch between supply and demand greatly pushed up spandex prices during the quarter. Spandex exports also surged during the first three quarters.
High prices raise cash flow in the market
Stimulated by demand from PTMEG, PBT and PBAT sectors, average cash flow in the BDO-PTMEG-spandex market expanded during the first three quarters of this year.
The average cash flow for spandex 40D climbed upto 11,836yuan/mt, 16,104yuan/mt and 26,110yuan/mt respectively during the Q1-Q3 period corresponding period of last year. Spandex 15D, 20D, 30D and some other differential products turned out to be more lucrative. Overall, the spandex markets saw higher profitability during the first three quarters compared to the corresponding period of last year.