PTMEG Prices in Asia Rebound as Spandex Demand Increases in China

The Polytetramethylene Ether Glycol (PTMEG) market in Asia witnessed a substantial improvement in prices in December 2023, primarily driven by escalating demand from the downstream spandex industry. The consistent expansion of the Spandex Fiber Market is fueled by a rising need for flexible and comfortable fabrics across diverse industries. The increase in Tetrahydrofuran feedstock prices further contributed to the overall uptrend in PTMEG prices. The recovery in the demand for spandex, a resilient and elastic fiber widely employed in apparel such as hiking gear and leggings, has propelled Hyosung TNC's spandex facilities to operate at an impressive over 90% capacity.

Hyosung TNC's spandex production facilities achieved a remarkable operational rate exceeding 90%, directly responding to the escalating demand for spandex in China. Notably, China witnessed a substantial surge in spandex demand, reaching 690,000 tons compared to the corresponding period in the previous year. The country's declining self-sufficiency in spandex products is evident as imports surged more than 85%, contributing to the overall surge in PTMEG prices.

The consolidation of the spandex industry into an oligopoly has favored Hyosung TNC, the global leader in market share. Smaller competitors, faced with reduced competitiveness, are gradually shuttering their spandex facilities. The number of spandex producers in China dwindled from 22 in 2015 to 11 by the end of 2023, with four ceasing productions in December. CCF Group, a prominent chemical industry magazine in China, predicts that two more companies will halt spandex production this month, with others likely to reduce their operational rates, further impacting the PTMEG market.

The closures and shutdowns of smaller companies in China can be attributed to heightened competition and oversupply issues in the spandex industry. Additionally, instability in the supply of PTMEG, a crucial raw material, has escalated raw material costs, compelling smaller enterprises to halt production. This disruption in PTMEG supply is a critical factor influencing the broader spandex market dynamics.

In contrast, Hyosung TNC has strategically bolstered its market competitiveness by internalizing PTMEG production and introducing premium products. The company completed a $53 million investment in a PTMEG production facility in Vietnam in 2023. Hyosung TNC is also actively targeting the market with innovative products like Creora Bio-based, made from corn-derived materials, and Creora Fresh, designed to eliminate sweat odors, thereby positively influencing the PTMEG market.

The global spandex demand is projected to remain robust in 2024 as demand increases globally. With the increase in production capacity in China and India in the latter half of 2023 totaling around 77,000 tons, Korean spandex production companies, including Hyosung TNC, are well-positioned to enhance their performance and influence the PTMEG market. As Hyosung TNC's spandex production facilities continue to operate at optimal levels, the industry's trajectory remains closely linked to evolving dynamics in China's spandex market, global economic recovery, and supply chain challenges, impacting the PTMEG sector significantly. The ChemAnalyst Database anticipates continuous growth in spandex demand will increase the price of PTMEG.