March 29, 2024

Spandex production from warm to cold should be cautious

Spandex changes from warm to cold

Just in December 2014, due to the gradual weakening of demand, spandex prices have seen a general decline, and the bearish tone has been heard. With the industry inventories gradually increasing, and coincided with the peak of the first wave of production expansion at the end of the year, the spandex manufacturers have obviously increased their shipping pressure during the end of the year. The reasons for the drop in spandex prices are basically concentrated on the following points: First, the operating rate is always high, making the supply side always very adequate, and the limited demand growth, which in turn drives higher stocks, and some manufacturers have to change prices in order to destock. It is a matter of course; second, the cost of raw materials is still in the down channel. In 2014, the decline in PTMEG prices basically covered most of the spandex price decline. Pure MDI prices also fell due to other downstream demand weakness at the end of the year. In addition, prices of upstream ** prices were significantly affected by international crude oil price fluctuations, and market confidence was obviously insufficient. Lower expectations may be difficult to change for some time in the future. Under such circumstances, although the spandex industry has experienced a year-long decline, after the recent record low, the trend of relative weakness in the next one to two months has been difficult to avoid, especially for companies with relatively low cost control. Just opened the curtain.

In the past two or three months, the downward trend in the prices of raw materials PTMEG seems to have shown signs of slowing down. On the one hand, the new production capacity has been at a relatively low load. It is still difficult to open the market in the short term, and on the other hand, it is due to the downstream spandex industry. At a higher profit level, the load is relatively stable, and there is no pressure on the PTMEG industry at the demand side. The price of upstream BDO has been declining obviously in the past two months, while the decline of PTMEG price in mid-year is relatively lagging behind that of BDO. Although the recent PTMEG price does not show a relatively fast downward trend, it cannot be ruled out that there will be a subsequent price increase. Possibility of falling. While the price of another raw material pure MDI is relatively monopolized by the supplier, the price fluctuation does not appear to be significant in the short term, but it is put in a longer period of time, especially when its raw materials are affected by the obvious fluctuation of crude oil prices. Next, the price of pure MDI in the second half of the year was relatively large.

Looking into the future, pure MDI prices will continue to be gloomy in the short term, given the sluggish demand from their major downstream sources. Considering the price of the two raw materials of PTMEG and pure MDI, for the spandex industry, there is a lack of stable support for the upstream industry, and a considerable part of the manufacturers still maintain a considerable profit level. The difficulty of spandex prices in the near future is still relatively stable. Big.

The operating rate of spandex business is still at an ideal level. The main reason is that although the price of spandex yarn has been falling recently, downstream purchases are subject to tight funding, and although downstream production starts to decrease, actual downstream purchases can still be maintained. Certainly rigid stocking, and the most important point is that after the raw materials of the spandex industry went down, the gross profit level was eroded, but there was still a long distance from the loss. Therefore, the operating rate in the industry is generally acceptable and can still be maintained. At 80% or more; however, in the recent period, many companies have successively carried out load adjustments in the industry, and the pressure of inventory is constantly showing. Looking into the future, the inventory of the spandex industry has approached the high levels in recent years. In particular, mid-to-done denier spandex, such as 40D, slowed down significantly after the ebb tide, and the 20D fine denier previously sent to the higher expectations has not yet seen a significant increase. For good shipments, industry stocks have been around 40 days. If the price of spandex in the later period continues to decline, especially before entering the Spring Festival in February, the demand will inevitably slow after a concentrated holiday in the lower reaches of the country, and more companies will adjust their load to ensure that no losses will occur.

From the demand situation, it is still not optimistic. Before New Year's Day, the company’s return capital requirements are increasing, and the actual demand of the entire textile industry is still at a low level. The demand for the entire spandex market is unlikely to significantly improve; after December 2014, downstream areas include circular knitting machines, wrapping yarns, and warp knitting. The start-up of industries such as the decline has caused the spandex companies to face greater pressure to ship, and spans the downward cycle of spandex prices. Under the generally bearish sentiment of the downstream, they only need to purchase and have difficulty in stocking, and they will usher in the next month before the Spring Festival. In the last month of this year, in the circumstances that this year's downstream conditions were generally unsatisfactory, some companies even had plans for early holidays, and the downstream weaving industry was about to conclude. The demand for spandex is expected to be difficult to be optimistic. The next month's market will be spandex. Taking the goods may be even more difficult.

After two years of relatively good operating conditions in 2013 and 2014, especially the expansion projects represented by some large enterprises in the industry will be put into production one after another. Supply is no longer in short supply. However, the price of raw materials has been falling in the second half of the year—although the downward trend will continue to be confirmed—it will make the entire spandex industry more difficult to operate in 2015. However, better-run companies will still be able to maintain a better level of profits in the future.

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