Buy Fabric Fabric News Crude oil “has a high fever” and spandex leads the rise strongly! Downstream can’t hold back, elastic fabric prices are about to rise!

Crude oil “has a high fever” and spandex leads the rise strongly! Downstream can’t hold back, elastic fabric prices are about to rise!



Just when crude oil surged and everyone thought polyester filament would rise sharply, spandex unexpectedly surged by 2,000 yuan/ton. On March 1, a number of spandex factories such…

Just when crude oil surged and everyone thought polyester filament would rise sharply, spandex unexpectedly surged by 2,000 yuan/ton. On March 1, a number of spandex factories such as Huahai Spandex, Schulz Spandex, and Taihe New Materials issued emergency price increase notices, raising the quotations for 35-40D spandex by 2,000 yuan/ton.

Why did spandex suddenly skyrocket? The most fundamental reason is that the surge in international crude oil prices has driven up the prices of energy and chemical products across the board. In just 3 months, polymer MDI rose from 22,500 yuan/ton in January to 26,800 yuan/ton, with a cumulative increase of 4,300 yuan/ton! Among them, the increase in March was the most obvious, more than double that in February! As the world’s largest MDI giant, Wanhua Chemical’s price increase is bound to have a huge impact on the midstream and downstream industry chains, raising costs and compressing profits. As the peak season for downstream demand approaches, strong pressure from the cost side may eventually make downstream companies compromise and accept high prices. The factory was forced to raise prices to save its life!

As a further downstream gray fabric market in the textile industry, the surge in spandex may not be immune to this. As soon as the news of the price increase of spandex came out, downstream elastic fabric weaving companies related to the production of spandex also issued some news. However, among these news, there are signals of upcoming price increases, and there are also notices of the start of sales of elastic fabrics. In fact, no matter what kind of news it is, it is also a means for weaving companies to stimulate traders, which is exactly the same as the “trick” used by polyester factories. But the difference is that, under the leadership of chemical fiber leaders, it is not difficult for polyester factories to increase prices, but it is even more difficult for weaving companies to increase the price of gray fabrics.

Although some weaving companies have already sent out signals that the price of elastic fabrics is about to increase, they all reveal that there is great pressure to increase prices. As we all know, elastic fabric has been a very popular fabric in recent years, especially during the last year. The current situation of downstream orders for elastic fabrics is actually quite optimistic. There has always been a market for this type of fabric, but it is far from popular.

According to the person in charge of a weaving company, they produce many types of elastic fabric products, but only a few are really popular, and other varieties are average. Therefore, when basic profits can be maintained, we dare not increase prices rashly, fearing that customers and orders will be lost due to price increases. And when the spandex price first started to increase, I wanted to use this opportunity to clear out the inventory of some varieties.


01Expanding demand for spandex

In recent years, my country’s apparent consumption of spandex has increased year by year, reaching 681,000 tons in 2019. China’s apparent demand for spandex will increase to 782,900 tons in 2020, a year-on-year increase of 14.97%. It can be seen from the above data that the downstream demand for spandex is gradually expanding.

Under the dual influence of low clothing inventory replenishment in 2020 and recovery in demand in 2021, the demand side is expected to see a certain proportion of growth this year. So under the combined effect of the demand side and the cost side, the price of spandex will have a lot of room for upward growth.

02Crude oil “high fever persists”

In addition, affected by the Russia-Ukraine conflict and severe Western sanctions against Russia, international oil prices rose to US$110 per barrel. In order to cool down oil prices, the International Energy Agency held an interim ministerial meeting on March 1 and decided to jointly release 60 million barrels of crude oil reserves. However, this measure failed to effectively cool down oil prices because the scale of reserves released this time was less than market expectations and was insufficient compared with global crude oil consumption and potential supply shortcomings. It is difficult to balance the supply and demand relationship of crude oil in the short term, and factors such as the unclear prospects of Russia-Ukraine relations have also increased the market’s concerns about the further deterioration of the energy supply situation.

This provides strong support for textile raw materials, and the downstream industry is in the traditional peak season. In the future, the price of spandex will inevitably rise, and the fabric will follow suit.
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Author: clsrich

 
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