A few days ago, the General Office of the Jiangsu Provincial Party Committee officially issued the “Jiangsu Province Chemical Industry Safety and Environmental Protection Improvement Plan”, proposing to “promote rectification and improvement in accordance with laws and regulations”, “reduce the number of chemical production enterprises along the river”, “Reducing the number of chemical production companies in environmentally sensitive areas” and other stringent measures.
Affected by this, dye giant Yabang Co., Ltd. issued a production suspension announcement, and three dye subsidiaries stopped production independently to investigate possible safety hazards, making the supply of dyes even worse.
Dye prices rise, downstream pressure
Before the “Plan” was released, the price of dyes on the market had already risen. The increase of disperse dyes even reached more than 70%, and the cost of dyes in dyeing factories increased directly from 25%. To 45%.
Affected by this, printing and dyeing companies in Ningbo, Changshu and other places issued price increase notices and began to increase dyeing prices. The increase in the price of dyeing fees is basically around 300-1,000 yuan/ton depending on the color and type. Although dyeing factories in some areas have not increased the price of dyeing fees on the surface, if they want to dye fabrics of specific colors, they still need to Calculating the price of dye over cost, the price of over cost has increased significantly recently.
Whether it appears that the dyeing fee has increased or not, in fact it has increased. It can be said that the increase in dye prices has slightly led to the increase in dyeing fees.
This is very bad news for downstream gray fabric companies. Since April, the overall textile market has been in a sluggish atmosphere. Orders in the market have been much reduced compared with previous years, and there have even been cases of excessive inventory and sales. Therefore, the price of conventional fabrics has been in a situation of insufficient support. If not, dyeing fees will rise again, so the profits of fabric companies will be greatly compressed, and the compression range will reach 20%-40%.
Should the price of dyes increase?
For dye manufacturers, the recent increase in dye prices does not seem difficult to understand.
On the one hand, the current production capacity of dyes on the market is very concentrated.
Take disperse dyes as an example. The current disperse dye production capacities of Zhejiang Longsheng, Runtu Co., Ltd. and Jihua Group are 130,000, 110,000 and 100,000 tons respectively, accounting for more than 60% of the total production capacity. . In the future, as environmental protection and safety supervision become more and more standardized, the entry threshold for the chemical industry will inevitably become higher and higher, and the production capacity of dyes will inevitably become more concentrated.
With production capacity so concentrated, dye manufacturers will have a very large say in dye prices. In other words, there are conditions for dye prices to rise.
On the other hand, the price of dyes is also “forced” to increase this time.
The person in charge of Runtu Co., Ltd. said that the recent increase in the price of upstream intermediates is the main reason for the recent increase in dye prices. For example, the consumption of dispersed blue ANT intermediate hexabromine and intermediate reducing substances accounted for 27%, while raw material costs account for 81%; for reactive black KNB, the intermediate para-ester and intermediate H acid account for 58%, and raw material costs account for 98%.
It can be seen that the production cost of dyes has indeed increased recently, and there are reasons for the increase in dye prices.
Therefore, from the perspective of dye manufacturers, such a price increase is understandable.
The rise is not scary, the scary thing is the rise in speculation
“Buy up and not down” is a common mentality in the production and operation process, so when there is a good reason for an item to increase in price, there will be countless hands behind it to push it to an unimaginable level. The price was the same for PTA in the past, and the same is true for dyes now.
The price of dyes rose rapidly in the early stage, and the middlemen and suppliers of dyes even had the idea of hoarding. Some of them would rather pay liquidated damages than deliver on time. goods.
There were rumors that the early increase in dye prices was partly due to the fact that the cost of dyes had indeed increased, but more of it was due to the constant hype of dye manufacturers and their dealers, and for safety The expectation of production improvements is the next point of speculation.
A few days ago, the rectification plan has finally been implemented, and the intensity is unprecedented. It will have a huge impact on the cost and production capacity of dye production, and it is difficult to quickly launch new dye production capacity in a short period of time. The huge impact The production capacity gap will give room for a new round of speculation in dye prices.
The life of the dyeing factory is becoming increasingly sad
The “hard days” are back
Because of the increasingly stringent environmental protection measures in recent yearsDue to the measures taken, the life of the dyeing factory was not easy to begin with.
Data is displayed. In 2018, 1,715 printing and dyeing enterprises above designated size across the country achieved main business income of 283.313 billion yuan, a year-on-year increase of 2.98%, and the growth rate was 3.58 percentage points lower than that of 2017; the number of loss-making enterprises was 303, and the loss area was 17.67%, which was expanded from 2017 3.81 percentage points.
The companies that originally thought they should enter the park have entered the park, and the environmental protection facilities that should be purchased have also been purchased. The most difficult time is almost over, and good times are coming soon. Unexpectedly, the price of dyes suddenly went “crazy”. It can be said that “as soon as we returned to before liberation”, the previous feeling of fear returned.
Dye factory boycott, is it useful to boycott?
The substantial price increase of dyes has dealt a heavy blow to the printing and dyeing companies that have not yet recovered. Of course, the printing and dyeing companies will also make their own responses.
On April 17, the Printing and Dyeing Industry Association of Keqiao District, Shaoxing City, Zhejiang Province issued the “Initiative on Jointly Resisting the Abnormal and Sharp Increase in Prices of Dyeing and Chemical Materials”, which aroused controversy within the industry. extensive attention.
But how effective can such a boycott be?
Take Keqiao as an example. As early as 2013, 2014, and 2017, the Keqiao Printing and Dyeing Industry Association had repeatedly called for a joint boycott of the price increases of upstream dye companies, and even Zhejiang Province The Price Bureau also specially interviewed Zhejiang Longsheng and several other dye companies, demanding reasonable pricing, but in the end it only caused a temporary stir, with a feeling of “big thunder but little rain”.
The life of small dyeing factories is even more difficult
Compared to large dyeing factories, life of small dyeing factories is even more difficult. Generally speaking, large dyeing factories have sufficient funds and no shortage of orders, so the dye purchasing cycle lasts for 3-6 months, or even a year.
But smaller dyeing factories are not so lucky. A series of operations such as purchasing environmental protection equipment and increasing personnel costs have already occupied a large amount of working capital. In addition, small dyeing factories Orders are more flexible, so you won’t be able to buy dyes for several months like large dyeing factories.
This operation is not a problem in normal times and can make the operation more flexible. However, when the dye surges, the impact is devastating.
In addition, because the textile market has been weak since April this year, the number of orders from dyeing factories, especially small dyeing factories, is not as good as in previous years, so they are even more afraid to increase prices at will. In this way, they are equivalent to using higher costs but selling lower prices, and production and operation become increasingly difficult.
At present, because the downstream demand has not increased, the dyeing fees of dyeing factories have not increased much. It is equivalent to bearing most of the cost pressure alone. But when the cost of dyes really rises to an unacceptable level, dyeing fees must rise in order to survive. At that time, cost pressure will be even more transmitted to fabric companies. How should they respond when the entire textile market does not improve? </p
