The limited production of spandex by downstream buyers before the Spring Festival holiday and the extension purchase of spandex by downstream plants may surge Spandex prices this month. New spandex plants started trial production during the period while the existing plants increased their operating rate to 80 per cent, says a report by the CCF group. Suppliers sold and grabbed the market share with moderate profit.

Spandex prices had dropped after the Spring Festival holiday. Stocks of Spandex plants mounted as more downstream plants shut down for Spring Festival holiday than spandex producers. This led to a 5.4 per cent decline in spandex prices from February 07. However, a few spandex plants that had suspended production due to the Spring Festival holiday or the XXIV Olympic Winter Games resumed operation after holiday. By February 22, the operating rate of spandex plants rose by 9 percentage points to 91 per cent compared with early-Feb. Most plants in Middle China and West China ran at full capacity and plants in East China ran at above 87 per cent of capacity now.

Price of upstream BDO rebounded after holiday. Demand for PTMEG apparently recovered in February and may improve further. Price of PTMEG is expected to have very small downward space in end-Q1 and early-Q2, not ruling out to rise.