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Insight | Time:Aug 17 2016 3:28PM
Spandex production curtailment to kick off before G20
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With the G20 Summit around the corner, spandex industry reacts immediately. Inventory dramatically declines while sales ratio reaches new high.

In July, spandex downstream plants and traders both built up stocks actively, which dramatically increase spandex sales ratio to 160% and reduced spandex inventory accordingly. This was mainly attributed to three reasons. Firstly, spandex prices were thought to reach the floor after successive fall. Secondly, players were worried about logistics in Zhejiang around G20 Summit. Thirdly, spandex plants were expected to shut down intensively.

So far, the government has not issued certain document for traffic control, but security check is stricter while logistics companies become reluctant to receive orders as well.

Besides, spandex production curtailment is on the agenda. Around the G20 Summit, spandex plant operating rate is expected to decline to 60-70%. The plants nearby Hangzhou mostly schedule to shut down, involving about one third of total spandex capacity.

As the table shows, spandex plants in Zhejiang mostly plan to shutdown except Huafon and Hyosung.

Company Shutdown time Company Shutdown time
Zhejiang SheiYungHsin 8.24-9.6 Zhejiang Blue Peacock 8.1-9..6
Hangzhou Sunrise 8.24-9.6 Zhejiang Shumeier already shut
Hangzhou Asahi Kasei 8.24-9.6 Zhejiang Sihai 8.24-9.6
Shaoxing Kaipute 8.24-9.6 Zhejiang EBH 8.24-9.6
Shaoxing Longshan already shut Zhejiang Youbang already shut
Zhejiang Banglian 8.24-9.6 Zhejiang Yadi 8.24-9.6
Zhejiang Huahai 8.24-9.6 Hyosung Jiaxing No schedule
Zhejiang Hualai already shut Zhejiang Huafon

Owing to such intensive shutdown schedules, spandex supply is to keep tight in short term. Coupled with evident deficit pressure, spandex prices are likely to move up further.
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