Spandex capacity and production area distribution forecast in 2024

Spandex industry opened prosperously at the beginning of the 14-Five Year Plan. Spandex industry saw medium growth during the 13-Five Year Plan period. Stimulated by intensive orders from overseas buyers, and sound demand from mask, protective clothes, leisure apparels, sportswear and home dress, spandex market enjoyed high prosperity after Q4 2020. After many new spandex units started production in the fourth quarter of 2021, the supply tightness eased. The spandex capacity saw two-digit growth in 2021-2023 and the growth rate is estimated to increase in 2024. Spandex industry is back to integration cycle from prosperous cycle during the 14-Five Year Plan period. Leading companies are estimated to expand capacity substantially and some units in East China will be eliminated at the same time in the future. The gap between supply and demand is enlarging on spandex market.

Spandex capacity expansion accelerates

New spandex capacity will increase further in 2024, which may hit the yearly increment peak in history. New spandex capacity is expected to be at 343kt/year in 2024 and few will be eliminated. By the end of 2024, spandex capacity may increase by 343kt/year to 1,618kt/year in Chinese mainland, up by 26.9% on annual basis. The average growth rate of capacity is around 16.9% in 2021-2024 . After capacity continues rising, the contradiction between supply and demand on spandex market may be more prominent. The startup of some units with slow progress may be delayed into 2025 with stronger uncertainty on macro market, regional war outside China and slow increase of demand.

As for the startup progress, the launch of new units in the first half of 2024 is expected to be smaller than that in the second half of year. Most units which are scheduled to be put into production in the first half of 2024 are those delayed in 2023, with capacity estimated to be 87kt/year. In the second half of 2024, most new units are leading companies and some medium-sized enterprises, with anticipated capacity at 256kt/year. However, constrained by slowly growing demand, the startup of some new plants may be postponed into 2025. Therefore, the new units expected to start production in the second half of 2024 may contribute limitedly to the actual production increase.

Midwest China and East China: increasing capacity VS falling capacity

After large spandex units in Midwest China gradually commissioned operation in 2020-2024, the proportion of Midwest China is increasing while that of East China is reducing. The market share of Midwest China rises by 22 percentage points over the end of 2020. The proportion of Chongqing, Henan and Ningxia is estimated to advance to 55.1% by the end of 2024 in Chinese mainland, while that of East China (Zhejiang, Jiangsu, Guangdong, Fujian and Shandong) may fall to 44.9%. The proportion of Midwest China will surpass that of East China for the first time in 2024.