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Chinese spandex firms make profit in Q1 of 2013
26
Apr '13
Spandex manufacturing firms in China have posted profits during the first three months of the current year due to gradual rise in demand.
 
For example, Huafeng Spandex registered a net profit of more than 15 million yuan in January-March 2013 period, compared to loss of 27.35 million yuan made by the company during the same period a year earlier.
 
Similarly, Taihe New Material is likely to earn a net profit of over 10 million yuan for the three-month period, which would be an increase of around 100 percent year-on-year.
 
In recent months, spandex exports from China have gradually risen from single customer bases in Europe and the US, to countries like India, Bangladesh, Vietnam, Brazil, Indonesia and Turkey.
 
However, the current rally in spandex prices may not continue for long, according to analysts, as the Chinese spandex market is still oversupplied.
 
The existing spandex demand in China is only about 400,000 tons annually, compared to overall production capacity of approximately 500,000 tons, i.e. an oversupply of 20 percent.
 
In 2011, spandex production capacity increased by about 25 percent in China leading to a fall in price. The prices of mainstream spandex varieties have fallen from a high of 100,000 yuan/ton to 45,000 yuan/ton in the past three years.
 
The recent increase in spandex prices would help some manufactures to earn profits, but it is still unlikely whether these enterprises would be able to sustain profit-making throughout the year, analysts say.
 

Fibre2fashion News Desk - China

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