Spandex cost support strengthened

Spandex market was under weakness in 2020 amid the outbreak of pandemic. Panic mood was strong on the market. The price gap between spandex and major raw materials was as low as 13,000yuan/mt at that time. Price of spandex declined apparently more than that of major raw materials since the end of 2021, and the price disparity has been narrowed to 16,500yuan/mt. Spandex 40D and coarse denier ones that were produced in Dec 2021 and Jan 2022 have been not profitable. The support from raw materials to price of spandex 40D and coarse denier ones will strengthen in end-Q1 and Q2. The cash flow of spandex 10D-30D was very good now. Then the price gulf between 20D and 40D may shrink further.

Price of upstream BDO rebounded after holiday. Demand for PTMEG apparently recovered in Feb and may improve further. Price of PTMEG is expected to have very small downward space in end-Q1 and early-Q2, not ruling out to rise