"Relics" appeared on November 4, 2010, when the harmony conference of the spandex industry was held again in Shaoxing, bringing a bit of vitality to the domestic spandex market which was originally in the off-season. Although the reactions from dealers and textile enterprises across the country were not very active downstream, they still maintained procurement based on demand. However, just one week after this meeting ended, the raw materials of the domestic textile industry basically all began to "soar". Amidst such an atmosphere, the raw materials of the spandex industry inevitably saw a significant increase.
China's textile industry started late in the production of spandex fibers, but the growth rate of the entire industry has been very rapid. According to relevant departments, by the first half of 2010, there were 76 large-scale spandex enterprises in China. Moreover, the average scale of spandex enterprises far exceeded the average level of the entire textile industry. This reflects that there are many large enterprises in China's spandex industry, with concentrated high-quality capacity and a small proportion of backward capacity. The overall growth momentum of the entire industry is still relatively healthy.
It is well known that spandex has long been regarded as the "seasoning" of textile products within the industry. If we compare textile products to a table full of delicious dishes, then spandex plays the role of monosodium glutamate (MSG), which is used in small quantities but indispensable. It is precisely because spandex serves as the "MSG" of textiles that its demand has a very tight linkage effect with other textile raw materials. It is understood that about 70% of China's chemical fiber textile export garments contain spandex components (with a content of 3% - 18%). As a result, it explains why the spandex industry has a stronger price enhancement capability compared to other products. In 2010, the price increase of spandex fiber raw materials in China was relatively small compared to other raw materials in the textile industry. Therefore, reviewing the spandex industry in China in 2010, overall, the spandex industry performed well, and the domestic spandex sector also showed a comprehensive upward trend.
Even more perplexing for some spandex enterprises was the fact that the previously agreed-upon intention to uniformly raise the price of spandex products seemed so pale and powerless in the face of a sluggish market and product overstock, eventually falling apart without any resistance.
In reality, due to the different production methods adopted by China's spandex producers, there existed certain cost differences between their products. Although these cost differences in spandex production were not significant, they inevitably caused instability in the domestic spandex fiber market prices at that time. Simultaneously, in the second half of 2010, China completed and continuously put into operation a batch of new spandex production lines. This objectively increased the supply of spandex raw materials in the domestic market, further deepening the balance of supply and demand in the spandex industry.
Under such circumstances, some companies that had "principally" approved the uniform price increase of spandex products quietly began their own discount sales plans. However, face-saving efforts were still necessary. At that time, these spandex producers adopted ostentatious so-called "preferential" sales measures. Thus, although the price of spandex fibers appeared stable from June to October 2010, in reality, the price of spandex fibers was in a basically declining trend.
Spandex is an elastic fiber, scientifically named polyurethane fiber, and has been commonly abbreviated as "spandex" in China. In 1937, spandex was first successfully developed by Germans, and in 1959, American chemical fiber enterprises successfully achieved the large-scale and industrialized production of spandex. Spandex has high elasticity, capable of being stretched 6-7 times, and can quickly return to its original state when the tension dissipates. In fact, in the textile clothing industry, spandex is generally not used alone but rather blended in small amounts into fabrics. This fiber possesses both rubber-like properties and fiber characteristics, mostly used as the core yarn in covered core yarns, referred to as elastic covered core yarns. Currently, spandex is widely applied in knitted goods, bandages, socks, underwear, jeans, etc.
From the perspective of major raw materials for spandex production, the price of polytetramethylene glycol (PTMEG) rose from 26,000 yuan/ton at the end of October to 28,000 yuan/ton at the end of November, an increase of 7.7%; the price of pure isocyanate (MDI) also rose from 18,000 yuan/ton at the end of October to 20,300 yuan/ton at the end of November, an increase of as high as 12.8%. Meanwhile, international oil prices, closely related to the chemical fiber industry, also showed an upward trend. Thus, the price increase of spandex fibers became an inevitable and necessary action.
However, downstream textile enterprises in the spandex industry did not "buy into" this. The main reason was that the domestic market's demand for spandex fibers and their products had not significantly increased at that time. In the international market, the export of China's spandex fibers and their products remained stagnant. Therefore, most domestic textile enterprises were still operating at low capacity, with obvious insufficient production volumes. Additionally, textile enterprises consistently adopted a suppressive attitude towards upstream spandex fiber producers. On one hand, they tried to use inventory spandex raw materials as much as possible, and on the other hand, they adhered to the principle of purchasing spandex raw materials based on demand. This directly resulted in an oversupply situation in the entire spandex market at that time, leading to depressed prices.
In the first half of 2010, China's spandex industry had yet to fully recover from the impact of the global financial crisis, and the export volume of spandex products did not show significant increases. Therefore, the price of spandex fibers remained relatively low. At this time, however, the price of polytetramethylene glycol (PTMEG), one of the key raw materials for spandex, remained at a high level. This created an abnormal phenomenon in the entire spandex industry where the price of raw materials was higher than the finished product. Subsequently, the prices of two other important raw materials used in spandex production, isocyanate (MDI) and 1,4-butanediol (BDO), also began to gradually rise. Under the increasing pressure of raw material costs, domestic spandex producers had no choice but to start considering raising the price of spandex fibers.
Coincidentally, due to energy conservation and emission reduction tasks around June and July of 2010, some local governments began implementing the controversial "power cut and electricity restriction" measures on spandex production enterprises. This measure directly led to a significant reduction in domestic spandex production at that time. Meanwhile, domestic spandex industry harmony conferences were also being held fervently. This conference not only determined the inspection dates for various spandex production enterprises in the industry, resulting in a forced reduction in the production of spandex fiber products, but also formed a principled intention among the various spandex production enterprises in the industry to uniformly raise the price of spandex products to avoid losses. All these situations and intentions seemed to indicate that the price increase of domestic spandex fiber products was already a foregone conclusion.
In 1989, a textile enterprise in Yantai, China, was the first to begin producing spandex domestically. Nowadays, the main methods of spandex production include dry spinning, melt spinning, wet spinning, and chemical reaction methods. However, regardless of which production method is used, the enormous environmental impact cannot be avoided. With economic development, China now has an annual production capacity of more than 350,000 tons of spandex, making it the world's largest spandex producer.