Hyosung nears full operation as spandex demand recovers

Hyosung TNC’s creora® bio-based spandex [Image source: Hyosung TNC]

South Korea’s Hyosung TNC Co. recently saw its spandex production facility operating at a rate exceeding 90 percent as demand for the functional fiber shows signs of recovery.

According to industry sources on Tuesday, the operating rate at Hyosung TNC’s spandex production facility topped 90 percent as of the end of 2023. The increase in production is attributed to the rising demand for spandex in China, the largest exporter of petrochemical products.

According to NH Investment & Securities Co., spandex demand in China increased by 13.4 percent during the first ten months of 2023 from the same period the previous year, hitting 690,000 tons. China’s self-sufficiency rate in spandex products is declining, with spandex imports increasing by 88.1 percent and exports decreasing by 2.7 percent over the same period.

Demand for spandex is expected to remain robust this year. HI Investment & Securities Co. estimates the global increase in spandex demand to be around 100,000 to 110,000 tons in 2024, noting that the increased production capacity in China and India in the second half of 2023 was only around 77,000 tons. Korean spandex production companies, including Hyosung TNC, are thus expected to improve their performance.

The fact that the spandex industry is entering a period of oligopoly is also seen as a positive factor for Hyosung TNC, the world’s leading company in market share. Currently, smaller companies with low competitiveness are closing their spandex facilities.

“China’s Shuangliang Group closed a spandex facility with a capacity of 32,000 tons in 2023, and TK Chemical Corp. in Korea also suspended spandex production in September of the same year,” NH Investment & Securities analyst Choi Young-gwang said.

The number of spandex producers in China is also declining. Excluding major players such as Huafon, Huahai, Bailu, and Yantai, the number of spandex makers fell from 22 in 2015 to 13 in 2021 and dropped to 11 in 2023. Four out of the 11 companies ceased production at the end of December 2023. Chinese chemical journal CCF Group predicted that two more companies will halt spandex production in January 2024 while others will reduce their operating rates further.

The continuous shutdown or closure of small and medium-sized companies in China comes amid an oversupply of spandex as the industry faced intensified competition from 2020 onwards. The supply of polytetramethylene ether glycol (PTMG), the main raw material, was also in short supply, driving up raw material costs.

On the other hand, Hyosung TNC maintained its market competitiveness via PTMG internalization and product premiumization. The company completed a PTMG production facility in Vietnam with an investment of $53 million in 2023 and is also targeting the market with not only general products but also items such as ‘creora® bio-based spandex,’ processed from corn, and ‘creora® Fresh,’ which eliminates sweat odor.

Spandex is often referred to as the ‘semiconductor of the textile industry’ due to its excellent strength and elasticity, making it widely used in various products such as sportswear, leggings, stockings, and diapers.