Unstable factors restrict the rise of spandex

Sinochem Xinxinxun was affected by the decision of this month's spandex industry coordination meeting. From mid-term, the price of spandex's various specifications began to rise. Among them, spandex 40D's increase was relatively large, rising from the previous 51,000 yuan/ton to 53,500 yuan. /Ton. Judging from the current market conditions, September did have a very positive impact on the spandex industry. Various factors also contributed to the rise in the price of spandex products. However, looking to the future, there are still many unstable factors behind the positive results. As a result, the future spandex upside is relatively limited.

First, the favorable support of upstream raw materials makes spandex prices rise

Due to the recent suspension of overhaul of some MDI devices in Asia, the tight supply of imported goods in the market, and the power-restricting policies implemented in summer in some provinces in China also affected the production of MDI, resulting in an overall tightening of MDI supply, which also led to the use of spandex. The price of raw MDI increased. Due to the impact of the Mid-Autumn Festival holiday, the actual market opening time of pure MDI is relatively short, and the market operating time is relatively short. The trading atmosphere is generally high, and the market price remains high, and the transaction price is temporarily stable.

Second, the growth of downstream demand and the relaxation of power-reduction policies began to enter the stage of price and price increases.

With the celebration of the Mid-Autumn National Day, the downstream textile industry has ushered in its “golden ninety and silver ten” peak season. The inventory of downstream manufacturers is gradually digested, and the procurement intentions are continuously rising, resulting in the current tight supply and demand relationship of the spandex market. , so the recent spandex industry ushered in a new round of price increases. According to statistics, in recent years, China's spandex market has maintained rapid growth with an average annual growth rate of 10%, and spandex products have a promising market development prospect in China. At present, the domestic textile industry has entered the normal production and sales season, and the demand for spandex is continuously increasing.

Since the beginning of the summer, some regions in the country have implemented policies to cut output and cut production due to power cuts. At present, these policies have basically come to an end. The reduction and suspension of production of spandex has started to resume production in the early stages, and the next spandex production will increase further. The overall inventory in the supply sector is clearly lower than the same period of previous years, which makes the spandex business mentality is still relatively firm. According to the current performance of the textile industry, the increase in the total supply will certainly affect the adjustment intention of the production enterprises to the price. The spandex market in the near future will begin to enter the favorable phase of volume and price.

Third, the *** exchange rate instability, affecting domestic exports

Since mid-September, the middle price of *** against the US dollar has risen by 69 basis points to 6.7181, which is also the highest level since the exchange rate reform in 2005 on the fifth consecutive trading day. The appreciation of *** has relatively increased the costs and quotations of various export industries. At the same time, it has also lost some of the low-price competitive advantages of Chinese products in the international market, and exports will be subject to certain restrictions.

According to statistics, the end product of the spandex industry, the apparel industry, has an export dependency of 60%, and the value of the apparel industry is 1% per liter. The overall degree of damage to the apparel industry is reflected in the drop in the industry's profit margin of 6.18%, which is higher. On the other hand, the appreciation of the renminbi weakened the export competitiveness of enterprise products, made it more difficult to sign contracts with foreign companies, and the export sales revenue also fell. As a result, some export companies turned to domestic sales, thereby aggravating competition among domestic enterprises. From a deeper perspective, if the exchange rate is unstable and the export market shrinks, it will cause an increase in the number of domestic unemployed people. The employment issue is directly related to social stability. This is the biggest ** that *** appreciation has brought.

These factors will also affect the future development of the spandex industry. From an analysis point of view, spandex exports will also decrease due to the appreciation of ***, so although spandex has a rising trend in the recent period, the rate is still lower than in previous years. So overall, the rise of the industry in the future is not smooth, and there is not much room for growth.