Taking A Close Look At China's Spandex Industry Development

China‘s spandex industry is undergoing significant shifts and transitions, marked by key developments during the 13-Five Year Plan and the initiation of the 14-Five Year Plan. Let’s delve into the industry’s journey, exploring growth patterns, market dynamics, and projections for the coming years.

Key Highlights

Here are the details:

1. 13-Five Year Plan & Post-2020 Prosperity: The 13-Five Year Plan witnessed moderate growth in the spandex sector, setting the stage for a transformative period post-2020. High prosperity unfolded after Q4 2020, driven by intensive overseas orders and escalating demand for a diverse range of products.

2. Capacity Expansion & Alleviating Supply Tightness: New spandex units commenced production in Q4 2021, contributing to the alleviation of supply tightness. Spandex capacity experienced two-digit growth from 2021-2023, with expectations for an acceleration in 2024.

3. Transition To Integration Cycle: As the industry embraces the 14-Five Year Plan, it is transitioning from a prosperous phase to an integration cycle. Leading companies are poised to significantly expand capacity, potentially resulting in the elimination of some units in East China.

4. Widening Gap Between Supply & Demand: The market faces challenges as the gap between supply and demand widens. Anticipated new spandex capacity in 2024 is expected to contribute to a 26.9% annual increase by year-end.

5. Projected Growth & Contradictions: The capacity growth is projected to average around 16.9% from 2021 to 2024. However, contradictions between supply and demand may become more prominent with continuing capacity increases.

6. Startup Progress & Delays: The expected startup progress of new units in H1 2024 is forecasted to be smaller than in H2. Units initially scheduled for production in H1 2024 faced delays from 2023, with an estimated capacity of 87kt/year.

7. Regional Dynamics: In H2 2024, leading companies and medium-sized enterprises are expected to contribute to new unit startups in Midwest China, contrasting with the falling capacity in East China. The market share of Midwest China is estimated to rise by 22 percentage points by the end of 2024.

OFB’s Insight

China‘s spandex industry is navigating a complex landscape of growth, integration, and regional dynamics. The projections for 2024 suggest both opportunities and challenges, with the industry undergoing transformative changes that will shape its trajectory in the years to come.