The hottest spandex industry may now turn downward

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On April 9, the Spandex Industry Association raised the price of spandex 40d to yuan/ton. If the price increase in 2009 turned the spandex industry into a profit as a whole, then this year's price increase has completely rid it of its decline. According to the survey, the real gross profit margin of some Spandex Enterprises has exceeded 20%. After the price increase, the further emergence of the market has brought confidence and optimism to the extruder enterprises, putting the risk behind them, and the inflection point of spandex price will be unknowingly approaching in the future

although the industry association has raised the price, the order receiving price quoted by downstream manufacturers for spandex 40d remains at 57000 yuan/ton. As the downstream textile and garment enterprises are more cautious about subsequent orders, they tend to use early-stage inventory production, and dealers are also eager to make profits at preferential prices. Obviously, it still needs a process to reach the target price of 60000 yuan/ton with the backbone enterprises in the industry as the main body

Jiangjianren, an expert of Keqiao Textile Index Office, believes that in this boom cycle, the maximum price of spandex 40d will reach 65000 yuan/ton, and then a downward inflection point will be formed. At present, there is still up to 14% room for price increase of spandex 40d. Although he continued to be bullish on the price of spandex, Jiang Jianren believed that securities companies' prediction of the performance of listed spandex companies was too high, "the earnings per share in 2010 should be less than 1 yuan."

there is limited room for demand to increase.

spandex is known as the "industrial monosodium glutamate" of textile. As a fabric additive, the dosage accounts for only 3%, so it is relatively easy to raise the price. Its function is to make the fabric soft and elastic. Jiang Jianren believes that although spandex is a necessity for high-end fabrics, the dosage is not invariable. If the price of spandex is too high, the downstream will sacrifice some fabric elasticity and reduce the amount of spandex, or choose alternative materials to reduce costs

at present, the downstream demand for spandex has rebounded strongly. The operating rate of wrapped yarn (accounting for 85% of the demand for spandex) is about 80%, and the operating rate of warp knitting is close to 80%. At the peak of the boom, the operating rate of wrapped yarn is 90%. In fact, there is little room for improvement. At present, the overall operating rate of textile enterprises is 85%, and at the best, it is only 90%

the textile industry is currently recovering strongly. On the basis of ensuring domestic demand, exports have improved significantly. Jiang Jianren said that in terms of textile exports, there is still about 20% room to recover from the peak before the economic crisis. When textile exports peak, so does spandex

exports continue to recover, but the growth of downstream textile demand may be slow, mainly due to labor constraints. Zhu Yong, vice president of Shanghai Textile Holding (Group) Co., Ltd., said that textile enterprises are generally full of orders and operating rates, and they want to further increase production capacity, but there are not enough workers. Now the salary of 1500 yuan/month in Shanghai can no longer make front-line textile workers stable and mobile

if the labor-intensive industry cannot solve the human problem and the production capacity growth is limited, it will be transmitted to the upstream demand for spandex, which has become a more prominent contradiction in the industry

according to Zhu Yong, the situation of textile enterprises that survived the financial crisis has improved. The full export orders in the first two months of this year were driven by the demand of foreign retailers to replenish inventory. However, the good times did not last long. In March, clothing and textile exports fell year-on-year and month on month, even lower than that in March 2009. The demand for replenishment of foreign inventory was declining. It can be seen that foreign consumption as a whole is still at a low tide. Zhu Yong believes that although there is still room for export to rise, it will be completed in the way of time for space, and there is no possibility of explosive growth

capacity expansion exceeded expectations

the gross profit margin of the spandex industry was positively related to the oil price. The highest gross profit margin of listed companies was 40%, which occurred when the oil price was $140/barrel, while the overall gross profit margin of the industry was 30%, which had attracted a lot of capital intervention

the spandex industry cycle is very short, only years. According to Wang Qianjin, the person in charge of the first textile, it only needs 400million-500million yuan to form a 10000 ton capacity, and it can be put into production in about a year. In addition, the technical threshold is also getting lower and lower. "Five years ago, the threshold was high, and now even machinery and equipment have been localized."

according to statistics, in the fourth quarter of 2010, the spandex industry will have nearly 40000 tons of new production capacity in Yantai spandex, Xiaoxing Zhuhai, Jiangsu Taiguang, Hangzhou lanpeacock, INVISTA Foshan and Shaoxing Huahai. With the improvement of exports, new spandex capacity expansion plans also began to appear. Taking listed companies as an example, Yantai spandex announced on March 15 that a new 7000 ton/year comfortable spandex project is expected to be put into production within 14 months. The closed production enterprises of the exchange contactor are also rebuilding their production capacity to resume production. For example, Wuhuan spandex has been restructured, and it is understood that its planned production capacity reaches tens of thousands of tons

when the downward inflection point of spandex came into being two years ago, the domestic CPI remained high, and the government increased tightening efforts. The company also planned to issue two more products before the end of the year. At the same time, labor costs rose, the RMB continued to appreciate, and the expansion of new production capacity made the spandex industry face difficulties

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