China's spandex market faces supply glut

China's spandex industry is grappling with a severe supply glut. Despite robust production capacity expansion and double-digit growth since 2021, demand has fluctuated wildly. The sector experienced a sharp decline in 2022 due to economic headwinds and price drops, and while demand rebounded in 2023 and early 2024, it has lagged far behind supply growth.

Downstream textile and apparel manufacturers are operating at subdued levels. Weaving and knitting mills are running at around average historical rates, with domestic sales growth significantly slowing from the previous year. Exports, while positive, have also moderated.

Circular knitting plants, a key spandex consumer, have seen increased machine installations but low operating rates, indicating overcapacity. Covered yarn and warp knitting sectors have shown slight growth but face intense competition.

Overall, spandex demand growth has decelerated sharply to 12.6 per cent in the first half of 2024 from 25 per cent in the same period last year. The industry is mired in sluggish sales, price stagnation, and heavy losses, highlighting the urgent need for supply-demand balance.