On July 1, the price of a spandex factory increased by 1,000 yuan/ton, with 20D quoted at 105,000 yuan/ton, 30D quoted 92,000 yuan/ton, and 40D quoted 76,000 yuan/ton. Rise, rise, rise! These three words are the most appropriate to describe spandex. Spandex rose rapidly in June. Taking 20D spandex as an example, the price was 93,500 yuan/ton as of July 1, an increase of 5,000 yuan/ton from the beginning of June, climbing to a 10-year high.
01
With the arrival of the off-season, orders for four-way elastic have decreased
The water-jet and air-jet products produced from spandex raw materials are mainly four-way elastic. In other words, four-way elastic is the demand side of spandex, and its order quantity will have a certain impact on spandex. As we all know, elastic gray fabrics have become popular since May, and they are still the most popular type of gray fabrics on the market. Especially the four-way stretch fabric stands out from the stretch fabrics and takes the lead. But in fact, the downstream has entered the traditional off-season, orders have decreased, and orders for four-sided bombs are also gradually decreasing.
According to a trader: “The orders for four-sided bombs this year are indeed very good. In March and April, there were more than 100,000 meters of orders per order, but it has basically ended since May. Currently, there are no orders for four-sided bombs. .” Another trader also said that orders for four-sided bombs have decreased a lot, and he finally received an order of 20,000 meters, but in the end he failed to win it because the price was too high.
02
The stocking up of gray fabrics continues, and spandex is supported by demand
The off-season is coming , four-way stretch orders have decreased, but spandex raw materials have increased sharply, and downstream weaving companies still buy into it. The current inventory of spandex factories is as low as less than 15 days, especially the spot supply of fine denier continues to be tight. Which link is supporting the strong demand for spandex?
In fact, the flow of spandex gray fabric is not strong. In the final analysis, it is always in the hands of downstream production and processing parties, and does not reach the hands of terminal garment manufacturers. This is what we have been talking about before about the stocking up of gray cloth merchants. Since the beginning of June, there have been reports on the market that sales of elastic fabrics such as four-way elastic have increased, but not many are flowing into dyeing factories for production. It can be seen from the dyeing factory that a salesperson from a factory specializing in the production of four-sided elastic dyeing said that the current four-sided elastic dyeing orders have been reduced a lot. The dye vats in the four-sided elastic workshop used to be fully open, but now they can only open 70%. It can be seen that some of the gray fabrics sold are not used for production, but are still in the hands of gray fabric merchants and will basically be sold during the peak season in the second half of the year.
Grey fabric merchants are stocking up because they conclude that the peak season will usher in the second half of the year. And four-way stretch fabrics will become the main force in the second half of the year. In addition, the raw materials of spandex continue to rise. According to the current rising trend, the price of gray fabric will also reach a certain increase in the second half of the year. It is currently the off-season. Even if the price of spandex increases, the price of gray fabric will not rise, and many manufacturers sell it at discounts. Traders seized this opportunity to stock up. Although spandex is not easy to store, the peak season only lasts for three months in September, so it can be sold quickly. The stocking volume will not be too high, and it will not be a problem to complete the shipment in the second half of the year.
03
Be wary of the roller coaster market, buying the bottom is risky
But the editor is not optimistic Spandex can continue to rise, especially in the near future. In the absence of support from downstream orders, the price increase can only be temporary. From a long-term perspective, it is difficult to have such a violent rise again. Not only traders feel the arrival of the off-season, but weaving companies also begin to feel that the market is slowing down. A weaving manufacturer specializing in the production of elastic fabrics expressed helplessness: “The price of spandex raw materials keeps rising, but the price of gray fabrics cannot go up. The off-season is coming, and the shipment volume of four-way stretch fabrics has decreased a lot at the end of June, and the inventory is rising. In order to reduce inventory pressure, the factory , or decide to give cash discounts.” The market is sluggish, and demand is bound to weaken. It has been a month since gray fabric merchants started stocking up, and it will also come to an end. Under the influence of the dual demand reduction, weaving manufacturers’ demand for spandex has also been weakening, and the supply pressure of spandex has eased, losing the support of price increases.
On the other hand, we need to be wary of a sharp rise followed by a sharp fall. After all, the price of spandex is often in a stable state. According to past price charts, it can be seen that spandex almost always runs very smoothly. But in 2011, that is, 10 years ago, the price of spandex was also at a very high level, but then fell to a stable level. There has been a sudden surge recently, and prices have returned to the levels of ten years ago. It is not ruled out that history will repeat itself again and plummet to conventional levels.
Postscript
In general, the continuation of spandex’s rise in the short term still lacks the support of strong factors. Downstream weaving companies and traders need to be vigilant in hoarding goods. There are risks in bargain hunting. In the later stage, they need to pay more attention to the trend of raw materials and downstream shipments.
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