Core Viewpoint - The spandex industry is currently experiencing a supply-demand imbalance, with a potential recovery expected around 2026-27, despite short-term disruptions due to an uncontrollable incident at a spandex factory in Zhejiang [1][2]. Industry Overview - The spandex industry is in a new phase of rapid capacity expansion, with production capacity increasing from 892,000 tons in 2020 to an estimated 1,402,000 tons by 2024, reflecting a CAGR of approximately 12.0%. The capacity growth rate for 2023 is particularly high at 19.2% [2]. - Despite the increasing usage of spandex in synthetic fibers, demand growth is lagging behind supply growth, leading to a prolonged period of low industry profitability [2]. Profitability Outlook - As of September 2025, spandex prices are at a historical low of 23,000 yuan per ton, with a price spread of 10,500 yuan per ton. Leading companies are experiencing a net profit of approximately 1,200 yuan per ton, indicating that the industry is likely in a state of cash flow loss [3]. - The current operational conditions are unsustainable, and the industry may seek a new balance through adjustments in operating rates. There is significant potential for profitability recovery in the medium to long term [3]. Investment Focus - Companies to watch in the spandex sector include Huafeng Chemical (002064.SZ) and Taihe New Materials (002254.SZ), which are expected to benefit from the anticipated recovery in the industry [1].