Spandex Market: A global and Indian perspective

The global spandex market is currently experiencing a phase of oversupply following the Spring Festival holiday in China. While prices of other chemical fibers and cotton textiles have seen some increase, prices remained largely stable, with some tight varieties even experiencing a slight increase. This is due to a combination of factors. As per Stratview Research global spandex market is expected to grow from $6.35 billion in 2022 to $9.56 billion by 2028 at a CAGR of 7.06 per cent.

Global spandex market

Increased supply: The global spandex market is currently seeing higher supply. Many spandex plants in China, the world's largest producer, have resumed operations after the Lunar New Year holiday, leading to a rise in operating rates. Moreover o new production units are coming online.

Stable prices: Despite the oversupply, prices of major raw materials like PTMEG (a key feedstock for spandex) have remained stable, hovering around historical lows. This is due to weak demand and pressure from losses faced by sellers. While demand for certain products like sunscreen apparel and yoga wear is showing promise, the overall demand for spandex remains stagnant due to various factors, including seasonality and economic uncertainties.

Mixed demand: The cold weather post-holiday has impacted worker return to downstream fabric mills, resulting in slower-than-expected fabric production and reduced demand for spandex. Additionally, downstream players are currently digesting stock purchased before the holiday, further contributing to the demand slowdown.

Indian perspective

According to Verified Market Research, the global spandex market size was $7.748 billion in 2023 and is projected to reach $13.077 billion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 6 per cent during the forecast period 2024-2030. Other sources like Mordor Intelligence estimate the CAGR to be around 6 per cent during the forecast period 2022-2027

India is a growing player in the global spandex market, with several domestic manufacturers like Indo Poly, SRF Ltd., and Asahi Kasei India contributing to the production capacity. However, India still relies heavily on imports to meet its domestic demand, primarily from China and Southeast Asia. This dependence on imports makes the Indian market susceptible to price fluctuations in the global market.

India's domestic spandex production is limited compared to its consumption. While there are a few domestic producers, their combined capacity is insufficient to meet the growing demand.

The demand for spandex in India is driven by the growing sportswear and activewear market, as well as increasing disposable income. However, price sensitivity remains a key factor for consumers, especially in comparison to cheaper alternatives like cotton.

Similar to the global trend, spandex prices in India are expected to remain stable in the short term due to the current market dynamics. However, long-term price trends will depend on various factors, including fluctuations in global raw material prices, particularly PTMEG, a key component of spandex. Government policies and import duties impacting the cost of imported spandex. The evolution of domestic production capacity and its impact on supply and demand balance.

Future outlook

The future of the global spandex market is uncertain, with conflicting factors at play.

• Oversupply: The current oversupply situation is expected to continue in the short run, putting downward pressure on prices.
• Rising costs: However, rising costs of raw materials like oil could eventually lead to price increases in the long term.
• Technological advancements: Advancements in production technology and development of sustainable alternatives could also impact the market landscape.

In India the factors at play are:

Government initiatives: The Indian government's focus on promoting domestic manufacturing of synthetic fibers could boost domestic production of spandex.

Growing demand: As the Indian economy grows and disposable incomes increase, the demand for spandex is expected to continue rising. The evolution of domestic production capacity and its impact on supply and demand balance.

Overall, the spandex market is facing a period of uncertainty due to conflicting factors. While the global market grapples with oversupply and weak demand, India's growing consumer base presents an opportunity for the future. However, the success of domestic players will depend on their ability to improve production efficiency and offer competitive prices.