Raw material cost
The main spandex raw materials include PTMEG (polytetramethylene ether glycol) and MDI (diphenylmethane diisocyanate). If the prices of these raw materials rise, the production cost of spandex will increase, which will drive up the price of spandex; conversely, if the prices of raw materials fall, the price of spandex may also fall accordingly. For example, in the first half of 2021, the average price of PTMEG, the main raw material of spandex, reached 34,515.5 RMB/ton, up 99% from the same period last year, and the average price of another raw material MDI also rose by 55%. The increase in cost has become an important support for the price increase of spandex.
Market supply and demand relationship
Demand
The demand of the textile and clothing industry is a key factor. With the change of consumption concepts and the upgrading of consumption demand, consumers have an increasing demand for sports and leisure clothing. Fabrics containing spandex are widely used in professional sportswear, swimwear, protective clothing, etc. due to their excellent elasticity and other characteristics, making spandex stretch fabrics popular in the market. Increased demand will drive up the price of spandex. For example, after the epidemic, the recovery of domestic textile and clothing demand and the transfer of foreign orders have driven the growth of spandex demand; at the same time, the epidemic has caused people to spend more time at home and enhance their health awareness, which has led to an increase in the application of spandex in home sportswear and leisure sportswear, as well as sufficient orders in the textile industry, which have led to a rapid growth in spandex demand.
Demand from other industries will also have an impact, such as changes in the demand for spandex in the medical field, such as mask ear straps and protective clothing; in the industrial field, the demand for spandex for some special products, etc.
Supply
In the past few years, due to the sluggish price of spandex, the industry has accelerated the reshuffle, and many old production capacities have been eliminated. The supply and demand pattern of spandex has changed from overcapacity to tight supply, which will lead to price increases; and when spandex production capacity increases significantly and supply is loose, prices may face pressure. For example, in 2022, the spandex industry will have concentrated production capacity, and the spandex boom will continue to decline; in 2023, there will be a lot of new spandex production capacity, and the market supply is expected to increase, and it will be difficult for spandex to increase its overall price.
Industry competition: The intensity of competition in the spandex industry has an important impact on prices. If there are many spandex manufacturers in the market and the competition is fierce, the companies may lower the price in order to compete for market share; on the contrary, if the market concentration is high and a few large companies occupy a large market share, they may maintain price stability by coordinating or controlling production. At present, the domestic spandex production capacity is relatively concentrated.
Macroeconomic situation: Global and domestic macroeconomic conditions will affect the price of spandex. In economic prosperity, consumers have strong purchasing power and the demand for products such as textiles and clothing is usually high, which will drive the demand for spandex to rise and the price may rise; in economic recession, consumers' willingness and ability to consume decrease, the demand for spandex may decrease, and the price will be suppressed.
Energy price
The production process of spandex requires a certain amount of energy, such as electricity and steam. If energy prices rise, the production cost of spandex will increase, which may prompt companies to raise product prices to maintain profits.
Transportation cost: The transportation cost of spandex products will also affect its price. If transportation costs rise, for example, due to rising oil prices, changes in transportation policies, etc., this part of the increased cost may be partially passed on to consumers, resulting in an increase in spandex prices.
International trade situation
The import and export of spandex is affected by the international trade situation. If international trade frictions intensify, it may lead to restrictions on the export of spandex or increased import costs, which in turn affects the supply and demand relationship and prices in the domestic market. For example, in 2020, due to the impact of the new crown pneumonia epidemic, the export of the clothing industry in Southeast Asian countries shrank severely, and some textile orders were transferred to China, further pushing up the demand for spandex; while the weak foreign demand pattern in 2023 has not changed. According to data from the General Administration of Customs, textile and clothing exports fell year-on-year in January-February 2023, dragging down spandex prices.
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