The Quotation Fell By 1000, And The Cost Increased By 1000. How Do We Calculate This Account? Spandex Fighting For The Dragon

Since late February, when the cost is boosted, spandex once welcomed the first increase in 2019. In the mentality of buying or selling, the spandex production and sales rate also increased, and the industry inventory declined rapidly. Although the actual price increase was limited, it also led to a market turnover atmosphere, and the manufacturers indicated that the order increased.

However, the good news is not long. Recently, spandex manufacturers have lowered their quotations and markets. At present, the 20D mainstream talks in Zhejiang area refer to 39000-40000 yuan / ton, down by 1000 yuan / ton; 30D mainstream talks refer to 37500-39500 yuan / ton, down 500 yuan / ton; 40D mainstream talks refer to 32000-33000 yuan / ton, down 500 yuan / ton.

At the same time, as the raw material of spandex, MDI has again ushered in a large area of price increase.

In April 27th, Wanhua chemical announced that since the beginning of May 2019, Wanhua chemical regional MDI market in China has been listed at a price of 19000 yuan / ton (1200 yuan / ton higher than April price), the listing price of the direct selling market is 19500 yuan / ton (up to 1200 yuan / ton than the April price), and the pure MDI listing price is 27200 yuan / ton (up to 1000 yuan / ton than the April price).

The main culprit that led to the fall in the price of the spandex market is the order. Most manufacturers say that the downstream demand has been significantly reduced, the order volume has decreased significantly, and even the situation has been broken off. The downstream costs can not be transferred to reduce the purchase of raw spandex. In addition to the tax reform policy, foreign customers demand lower export prices, and the export volume of the terminal market is affected. There are also reactions from the industry. In the long run, price declines are inevitable.

The market price is even low, but the cost is increasing. The profits of enterprises have been squeezed. What has happened to the spandex industry in recent years?

Output growth is fast, the market is still digesting Xiao Xing and Xinxiang 18 years of new capacity.

At the end of last century, the price per ton of spandex yarn was two hundred thousand yuan. With the growth of domestic enterprises such as Huafeng spandex and spandex, the price of spandex dropped significantly. The average price in 2002 dropped to 86 thousand yuan per ton. At the end of 2015, the average price of 40D spandex product had dropped to about 35 thousand yuan per ton, and the latest market price was also around 35 thousand yuan / ton. The sharp decline in price promoted the widespread application of spandex in the fabric field.

It is understood that the decline in the price of spandex industry is on the one hand, driven by technological progress. On the other hand, the market is also experiencing the pain of overcapacity while the demand is breaking out. From the perspective of output growth, the average annual growth rate of domestic output in the 2012-2014 years is as high as 24%. However, the output growth rate of 2015-2017 years in the next three years has slowed down to an average of 3%. According to the data, the domestic spandex production in 2018 has increased 10.53% over the same period in 2018. Output growth is relatively fast, the market is still digesting Xiao Xing and Xinxiang's new capacity in 18 years.

Small businesses are changing hands and leading enterprises. The market will have three major trends in the future.

The rule of "big fish eating small fish, small fish eating shrimps" is no exception in any industry. Now the spandex industry is entering the adjustment period of production capacity. The development direction of the future spandex industry supply is: small capacity elimination, centralized supply and large single set of equipment. Faced with the present situation of overcapacity, many large enterprises usually adopt new capacity or merger and reorganization measures to eliminate backward enterprises by improving their technological advantages through "win win win strategy".

In recent years, there have been several small Spandex Enterprises' equity spandex in recent years.

Zhuji Ya Di spandex: in 2017, after exposure to the gold chain rupture, the enterprise went bankrupt and the local government took over temporarily. After that, the Hangzhou Hangzhou Qingshi Holding Group Co., Ltd. leased the production land and equipment, and continued to maintain production. Qingyun holdings is interested in purchasing the spandex spandex to expand its spandex productivity and increase market competitiveness.

So in December 2017, Qingyun holding set up Zhuji Qingrong New Material Co., Ltd. in Zhuji. The company was set up for the acquisition of the Al Atlantic spandex.

In September 2018, Zhuji Qing Rong new material Co., Ltd. won the highest price; Tian first developed and transferred part of the shares of the four seas spandex; the 10 thousand tons of Jiangyin spandex spanning capacity was stripped in July 2018.

In addition, the world spandex production capacity of about 1 million tons, production concentrated in Korea, Japan and Germany. China's capacity is about 750 thousand tons. Spandex production abroad has a high degree of concentration, and domestic relatively dispersed, in recent years, there is much room for improvement of concentration.

Trend 1: capacity transfer to the West; under the pressure of environmental protection, energy and manpower costs, spandex production capacity is transferred to the central and western regions; Huafeng spandex fiber to Chongqing, Taihe new material to Ningxia and Xinxiang chemical fiber itself in Henan area;

Trend two: concentration degree; in the next 3-5 years, with the expansion of the capacity of spandex leading enterprises and the stronger cost advantage, it is bound to lead to the deterioration of the survival environment of the spandex medium and small enterprises, and the exit of the enterprises. The enterprises with smaller capacity are smaller and the cost disadvantages are obvious.

We estimate that the capacity concentration of spandex industry will be increased to 61% in 2019, and the production of Huafeng spandex is expected to exceed 20% of the total domestic output.

Trend three: differentiation and multi headed spinning.

2019: the main variable lies in the progress of new deliverable capacity.

The incremental supply is 40 thousand tons of capacity in Xinxiang and 60 thousand tons in Huafeng spandex. There is an uncertain supply capacity increment: 30 thousand tons capacity of Shandong Ruyi in Ningxia, and capacity in Fujian Heng Shen planning.

Demand side: if the demand growth rate of spandex is maintained at 7% growth over the next three years (the average annual growth rate is 7% over the 2015-2018 years, and the average annual growth rate is about 13% in 2011-2018 years), the annual demand increment is about 45 thousand tons.

We look at it in three ways:

Neutral situation: 50%, it is possible that the decisive placement of Xinxiang and Huafeng is mainly in the second half of the year, and the supply and demand increments are half the time. Then the supply and demand generally maintain a weak balance throughout the whole year, and the supply and demand in the first half are better than the second half.

Optimistic situation: 30%, if possible, if some production capacity has been put into operation for more than 10 years (with capacity of 300 thousand tons in 2009), due to the longer production time, smaller scale, environmental protection and other aspects of pressure, there will be some capacity withdrawal expectations; if there is more capacity to withdraw, the overall supply and demand will be more optimistic next year.

Pessimistic situation: 20% possible, if the capacity of Ningxia in the planning and production capacity of Heng Shen and so on are also fully put into operation, and the demand is general, then there will be greater pressure of supply and demand, and next year there will be a major reshuffle.