Upstream Raw Materials Shrink And Dye Price Will Increases

Date:Oct 15, 2020

The Financial Associated Press reported on October 15 that due to the recent success of my country’s epidemic prevention and control, a large number of textile orders originally produced in India have been transferred to China for production, which has resulted in many domestic orders for garment manufacturing being scheduled to May next year. Aroused widespread concern.

With the improvement of global demand and the resumption of domestic work, the low point of apparel exports narrowed after a 30% year-on-year decrease in April, and it turned positive for the first time in August. In August, the national textile export value was US$14.72 billion, a year-on-year increase of 47%; the clothing export value was US$16.21 billion, a year-on-year increase of 3.2%, achieving a positive monthly growth for the first time this year. Huachuang Securities said that the "turnover" of the textile and apparel industry was mainly due to the rapid transfer of overseas orders from India and other countries to domestic production during the peak foreign trade season.

On the upstream side, the current chemical industry has entered the peak demand season for the golden nine and silver ten. In early September, news of the increase in dye prices on the market was overwhelming, and the price of disperse dyes has been raised. Taking disperse black ECT300% dye as an example, the ex-factory price of the product has risen from the previous 28 yuan/kg to the recent 32 yuan/kg, an increase of 14%. In the past two months, the price of this product has been raised by 36%. Huachuang Securities said tight supply is the main reason for the increase in dye prices.

As an important raw material for disperse dyes, m-phenylenediamine is also in short supply. Previously, domestic manufacturers of m-phenylenediamine mainly included Zhejiang Longsheng (65,000 tons/year), Sichuan Hongguang (15,000 tons/year), Jiangsu Tianjiayi Chemical (17,000 tons/year) and other companies, among which Tianjiayi In March 2019, an explosion accident occurred, completely withdrawing from the meta-phenylenediamine market. However, Sichuan Hongguang was found to have 23 problems and hidden dangers during the law enforcement inspection, so it was taken on-site treatment measures to temporarily suspend production and business. There will be only one supplier of m-phenylenediamine in Zhejiang Province. Under the dual stimulus of tight supply and demand for performance growth, Zhejiang Longsheng's m-phenylenediamine has begun to rise in price.