Operating rate of spandex plants was slow in rising

Operating rate of spandex plants was slow in rising. The run rate of upstream feedstock plants rose limitedly due to insufficient natural gas. Tight supply of PTMEG constrained the increase of operating rate in big spandex plants. The operating rate of spandex plants increased to 83% by Feb 14 from 57% when the spread of pandemic peaked in Zhejiang and Jiangsu. Price of BDO soared to above the break-even line, which hiked by 4,400yuan/m or 47.8% from 9,200yuan/mt in early-Feb to 13,600yuan/mt now. Offers of PTMEG are at 22,000yuan/mt now, with large increment. There are many new BDO units to be launched but the startup is delayed when the biodegradable plastics face the pressure from macro policies. Supply glut on the BDO industrial chain is expected to be escalated, not ruling out price of BDO to fall later. The inventory of spandex was seriously devaluated last year due to collapsing feedstock price. Downstream plants' spandex inventory can guarantee production for near one month or longer, but fabric mills are slow in restarting. Some spandex plants are cautious in hoarding up stocks amid high PTMEG price, which prevent the raise of operating rate in spandex plants to a certain extent. As a result, supply of spandex is still tight.