Spandex demands pick up

Asian Textile Business, Sep 2003

Japan

Demands for spandex are increasing in the current third quarter after the settlement of SARS and the war in Iraq. Excessive production seems to have been absorbed by vigorous demands on the Asian market.

44 dtex was recently quoted at US$8.50/kg (GIF) as compared with US$10.00 before the outbreak of SARS. The spot price is reportedly below US$7.00. The low prices are being offered by some Korean producers who have large stocks due to poor marketing abilities.

According to an official of Opelontex, which has taken over the "Lycra" business from Du Pont-Toray Co., Ltd., Korean producers have increased their capacities to a large extent during the last several years, but production has not increased so much as some of these new capacities are not operating at full capacity. Meanwhile, demands in the Chinese market are growing beyond expectations, and have been able to absorb excess production.

According to a report released by the Japan Chemical Fibers Association in December of 2001, spandex demands were forecast to reach 37,000 tons in 2002 and 47,000 tons in 2003. However, real demands have been growing at a faster rate, and are expected to reach 53,000 tons this year. "Demand will further increase to around 60,000 tons," according to industry sources, which say that the future of supply and demand will depend on the expansion in China.

China's spandex production has rapidly increased from 6,000 tons in 1998 to around 30,000 tons recently, as China is shifting from an importer to a producer of spandex.

Under such circumstances, Japanese spandex producers intend to produce specialty items for survival. The production scale of most Japanese producers is smaller than foreign producers, so they intend to produce value-added items. For instance, Opelontex will continue its campaign to further improve the brand recognition of "Lycra" and tie up with textile manufacturers for the development of textiles possessing high function as well as highly refined taste. Asahi Kasei Corporation is concentrating on the development of specialty yarn for the domestic market, while intensifying the production of commodity items in Taiwan and China.