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Insight | Time:Nov 14 2017 5:12PM
Big events for China spandex industry in 2017
 
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Spandex market gradually stepped out bottom in 2017 with recovering prosperity impacted by supply change, environmental protection issue, bulk commodity market and rising feedstock price. Let’s review some crucial incidents that affected the industry in 2017.

1. Shandong Ruyi will acquire INVISTA’s Apparel & Advanced Textiles business (A&AT), which includes the renowned, global LYCRA® brand
On October 28, Shandong Ruyi and INVISTA signed final agreement. Shandong Ruyi will acquire INVISTA’s Apparel & Advanced Textiles business (A&AT), which includes the renowned, global LYCRA® brand. Included in the transaction is INVISTA A&AT’s portfolio of differentiated fibers and brands including LYCRA® fiber, LYCRA HyFit® fiber, TERATHANE® polytetramethylene ether glycol (PTMEG), 1,4 butanediol (BDO), and tetrahydrofuran (THF) production etc. The acquisition is scheduled to complete by mid-2018.

2. Anti-dumping issues
Spandex capacity is supposed to be around 1.06 million tons by the end of 2017 and capacity in China may be around 0.75 million tons, sharing around 70% of world total. India imposed anti-dumping duty on spandex from China with expanding capacity and higher quality in China and the exploration of Indian market. Imports of spandex are small in China. China stopped implementing anti-dumping measure against spandex importing from Japan, Singapore, South Korea, Taiwan China and US from October 13, 2017.


2.1 India imposed anti-dumping duty on spandex from markets like China
Indian Finance Ministry imposed anti-dumping duty on 'Elastomeric Filament Yarn' (popularly known as Spandex) from markets including South Korea, China, Taiwan China and Vietnam on May 3 (local time).

2.2 MOFCOM Announcement No. 54 of 2017 on decisions of stopping implementing anti-dumping measure against spandex importing from Japan, Singapore, South Korea, Taiwan China and US

According to the provisions of Article 48 of the Anti-dumping Regulations of the People’s Republic of China, the MOFCOM decided to stop implementing anti-dumping measure against spandex importing from Japan, Singapore, South Korea, Taiwan China and US from October 13, 2017.

3. Spandex price surged on intensified environmental protection pressure
In Aug, the fourth round of environmental protection inspection began. Among 26 spandex companies (by plant site), 20 spandex plants suspended or cut production by end-Aug, covering around 253kt of capacity, sharing around 36.4% of national spandex capacity in China, and the operating rate of spandex industry once slipped to 63%. Price of spandex soared with rising feedstock and accessories price, shrinking supply and modest downstream demand.

4. Supply of MDI reduced on hurricanes in U.S.
Around 50% of local MDI capacity was affected on hurricanes in U.S., and coupled with increasing export orders in Yantai Wanhua, supply tightness of MDI was intensified. Price of MMDI in Yantai Wanhua hit new high since 2008.

5.Spandex capacity expanded but capacity elimination also existed 
Spandex capacity expands rapidly in 2017, which is mainly contributed to the growth in large plants, and industrial concentration ratio improves. Supply of spandex also exists in Northwest China. With the expansion of capacity and the development of multi-end spinning technology, old equipment in East China finishes technology upgrade and some old equipment is eliminated.


*Spandex capacity increases in Xinxiang Chemical Fiber
Xinxiang Chemical Fiber’s super soft spandex 2nd phase project has started trial production in December 2016 and formal production started from March 2017. Spandex capacity of Xinxiang Chemical Fiber totaled 60kta, ranking the fourth place in China.

*Spandex capacity rises in Hyosung Quzhou
Hyosung Quzhou’s 1st spandex project covering 20kta has started trial operation from mid-March, 2017, and formal production commenced from May. The 2nd phase covering 20kta is scheduled to gradually begin production in December 2017. Hyosung Quzhou planes to produce 60kta of differential spandex with special function.

*Environmental-protectively differential spandex project starts operation in Ningdong Base
Ningxia Yadi’s 30kta spandex project has commenced operation in mid-October, 2017, and it plans to sell goods in mid-November.

*Huafon decided to eliminate partial outdated spandex capacity
To respond to environmental protection policy, optimize resource allocation, save energy and reduce cost, Huafon decided to eliminate 6,000mt/yr of outdated spandex capacity, and this unit has been completely offline in July 2017. 

*Invista Shanghai’s spandex unit shut down in November
Invista Shanghai’s spandex plant was closed in November 2017 on demolition and may be relocated later. Invista Foshan’s unit runs normally in Guangdong.

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