Spandex market growing twice as fast as other fibres
The global spandex industry is growing aggressively, achieving a current CAGR of more than double the rate for conventional fibres. With global consumption now pushing past 650,000 tonnes/year, boosted by new apparel end-uses and growing populations of middle-class consumers, Spandex is emerging from its niche. Little will prevent positive growth to the end of the decade.
In parallel with this strong demand growth, we are seeing significant changes in the spandex supply base. The surge in Chinese production has been fuelled by international investments into China as well as a wave of local Chinese investment.
We have identified a core group of Chinese spandex suppliers which are emerging from this mass of producers as real industry leaders — potentially with global leverage.
At the same time, the traditional spandex leaders — Invista, Hyosung and Asahi — are engaged in a diverse pattern of investments to achieve global leverage within the spandex industry. This industry is a complex battleground between different marketing philosophies between consumer brands, trade brands and commodities. These three distinct market positions each determine the marketing support deployed and the complexity of product range which is supported. They consequently generate very different levels of pricing and margins.
Crucially, Invista’s apparel yarn business — including its world-famous Lycra brand — is for sale, with owners Koch Chemical having received offers from a range of prospective buyers for this distinctive business. If Lycra were to be sold, this would potentially change many aspects of the current balances within the global spandex industry.