Spandex prices may rise in the short term as feedstock prices continue to rise Currently, prices of spandex 20D-40D have increased 178 to 206 per cent to 50,000-69,000yuan/mt since late-August, 2020. Current spandex prices have reached their highest levels since April 2008. Prices of spandex 40D have increased by 14,000yuan/mt with tight supply.

Spandex capacity will increase from commencement of operations at Huahai’s 30kt/year new unit in August. Spandex production requires two major raw materials PTMEG (0.78) and MMDI (0.18). The cost of these materials increased to 40,000yuan/mt,in April but slipped to 32,200yuan/mt thereafter. In July, the price of BDO, the feedstock of PTMEG, rose rapidly as players held optimistic view toward market outlook in the second half of year in expectation of massive demand for BDO from biodegradable plastics and PBT market. Therefore, cash flow of PTMEG declined. In addition, downstream spandex plants witnessed high profits and increased capacity. Under such circumstance, PTMEG plants are eager to follow the uptrend on BDO market.