Summary of the Conference Call on the Spandex Industry Industry Overview - The spandex market is experiencing stable demand expansion, particularly in outdoor, yoga, and sun-protective clothing sectors [1][2] - Domestic spandex production capacity is approximately 1.4 million tons, with China being the largest consumer market, followed by Brazil and Turkey [3][15][17] Key Points and Arguments - **Market Demand**: The demand for spandex is consistently growing, especially in elastic fabric applications. The market is expected to maintain stable growth due to the increasing demand from outdoor and sports brands [3][4] - **Production Capacity**: Limited new production capacity is anticipated in 2025, with only Hengsheng adding 50,000 tons and Xiaoxin releasing 30,000 tons. Other companies are still in the equipment installation phase [10][13] - **Environmental and Cost Pressures**: Coastal spandex manufacturers face significant environmental and cost pressures, leading to potential closures or relocations. More companies are expected to exit the market by the end of this year or early next year [6][7][11] - **Price Adjustments**: Some manufacturers have proposed price increases of 500 to 1,000 yuan due to market conditions, despite overall production challenges [5][10] Additional Important Insights - **Technological Advancements**: Korean companies have a competitive edge in terms of breeding speed, output, and quality. Environmental products are expected to become a crucial competitive factor in the future [3][19] - **Inventory Levels**: The average inventory level in the spandex industry is around 50 days, with leading companies maintaining lower inventory levels compared to smaller manufacturers [25][26] - **Biobased Spandex**: There is a growing interest in biobased spandex, although current demand is low. The market is expected to see increased production and adoption in the next 3 to 5 years [20][23][24] Conclusion - The spandex industry is at a critical juncture, with stable demand but significant challenges related to production capacity, environmental regulations, and cost pressures. The outlook for the second half of 2025 and into 2026 appears cautiously optimistic, with potential improvements in supply-demand dynamics [28]

Core Viewpoint - The spandex industry in China is experiencing significant growth driven by increasing demand in various sectors, particularly in textiles and medical applications, while facing challenges related to pricing and supply-demand dynamics [1][12][20]. Industry Overview - Spandex, known for its exceptional elasticity and durability, is widely used in textiles, medical supplies, and industrial applications. Its production is primarily based on polyurethane, with a notable elongation rate of 500%-800% and over 95% recovery [2][4]. - The Chinese spandex industry is characterized by a concentrated midstream sector, with leading companies like Huafeng Chemical holding nearly 80% of the market share [4][16]. Production and Capacity - China's spandex production capacity is projected to increase from 950,000 tons in 2020 to 1,380,000 tons by 2024, with an annual growth rate of 9.78% [10][12]. - By 2025, the total production capacity is expected to exceed 1,440,000 tons, further solidifying China's position as the largest global producer [10][21]. Demand and Consumption - The demand for spandex is anticipated to maintain an annual growth rate of over 7%, driven by sectors such as sportswear and medical textiles, with functional and high-end applications gaining traction [20][22]. - The textile and apparel sector accounts for over 70% of spandex consumption, with rapid growth in sportswear and underwear segments [1][6]. Pricing Trends - The spandex market has seen a cumulative price decline of 19.11% in 2024, with expectations of a fluctuating price trend in 2025 [14][20]. - Current market conditions reflect a lack of cost support and pronounced supply-demand conflicts, limiting upward price movement [14]. Competitive Landscape - The spandex industry in China is marked by a concentration of leading players, with the top three companies holding a market share of 57% as of 2024 [16][20]. - Smaller companies are increasingly focusing on differentiated products and transitioning towards sustainable practices to remain competitive [16][18]. Future Development Trends - The industry is expected to shift towards structural optimization, innovation-driven growth, and green development, with a focus on high-quality production and technological advancements [20][23]. - Key trends include a slowdown in capacity expansion, a rise in demand for high-end and functional products, and a transition towards low-carbon and intelligent manufacturing processes [21][22][23].