Recently, the dye industry has ushered in a wave of “price increases.” Qingdao Haiwan Fine Chemicals Co., Ltd. (hereinafter referred to as “Haiwan Fine Chemicals”), Zhejiang Longsheng Group Co., Ltd. (hereinafter referred to as “Zhejiang Longsheng”), and Zhejiang Runtu Co., Ltd. (hereinafter referred to as “Runtu Co., Ltd.”) have successively released The product price increase notice involves all series of disperse dyes, and the price increase is about 10%. What is the reason for the price increase of this round of dye products? Will prices continue to climb? How long will it last?
Dye companies announced price increases
In this round of “price increase tide”, Gulf Precision was the first to issue a price increase letter. change. On August 23, the company issued a price adjustment notice to increase the price of dyes starting from the 23rd of that month, with the increase reaching a maximum of 2,000 yuan/ton. According to the price adjustment letter issued by Zhejiang Longsheng on September 4, the price of dispersed black and blue series has generally increased by 2,000 yuan/ton, and the price of dispersed red series has increased by 1,000 yuan/ton. Runtu Co., Ltd. has decided to make new price adjustments for some products starting from September 7. Among them, the price of dispersed black ECT/ECO 300% series rose to 26,000 yuan/ton, and the price of dispersed blue X-SF/ECO 300% series rose to 29,000 yuan/ton.
After sorting through the multiple price increase letters issued by the company recently, it is not difficult to find that the main reason for this price increase is the continued rise in the price of bulk chemical raw materials. For example, the price of m-phenylenediamine, the main intermediate in the upstream of disperse dyes, has risen rapidly from 25,000 yuan/ton to 27,000 yuan/ton in the early stage to 30,000 yuan/ton. The price increase of basic chemical raw materials such as sulfuric acid has been as high as 3 ~5 times, or even higher.
Industry analysts have different opinions on the “gold content” of this price increase. Gu Shujing, an analyst at Zhuochuang Information, said that recently, the prices of products such as dispersion black have increased by about 10%, which is more due to cost push. However, in fact, the market transactions are light and downstream demand has not picked up significantly. Some industry analysts also pointed out: “Currently, some downstream printing and dyeing factories have reported that prices have basically remained unchanged compared to the previous period, and some actual orders even have small discounts. Now the price of raw materials has increased a bit, but the overall market supply exceeds demand. The price still cannot rise.”
Although the cost side of raw materials is under pressure, the demand for dyes in the downstream printing and dyeing links has not yet improved. “We have monitored that the current operating rate of printing and dyeing factories is about 70%, which is a few percentage points lower than the same period in previous years. Printing and dyeing factories generally report that demand is not ideal, so companies are also more cautious in purchasing dyes.” The analyst said.
Longzhong Information monitoring shows that currently, the operating rate of the printing and dyeing industry has not returned to the level of the same period in previous years, and is still operating at a relatively low position. As of September 9, the comprehensive operating rate of the printing and dyeing industry in Jiangsu and Zhejiang was 67.32%, down 0.65% from the previous period; the operating rate of printing and dyeing factories in Shengze was 62.5%, the same as the previous period; the operating rate of printing and dyeing factories in Shaoxing was 72.14%, down from the previous period down 1.29%.
The increase in revenue in the first half of the year did not increase profits
Industry analysts pointed out that this round of price increases is also related to the weakness of dye prices in the first half of the year, resulting in a decline in the profitability of dye companies closely related. According to incomplete statistics from reporters, in the first half of this year, the sales volume of the dye industry has steadily increased, but product prices have declined to varying degrees, and relevant listed companies have increased revenue but not profits.
Take Shanghai Anoqi Group Co., Ltd. (hereinafter referred to as “Anoqi”) as an example. The semi-annual report shows that Anoqi achieved operating income of 549 million yuan in the first half of 2021, a year-on-year increase of 12.89%. With effective domestic epidemic prevention and control measures, the downstream market has gradually recovered. The company stated that as new production capacity has begun construction, the company has adjusted its marketing strategy in a timely manner to seize more customer resources and prepare sales market reserves for the release of new production capacity in the future.
However, in contrast to the increase in revenue, the company achieved a net profit of 63.9642 million yuan attributable to shareholders of listed companies in the first half of the year, a year-on-year decrease of 12.27%. Obviously, the steady growth of the company’s revenue has not led to the simultaneous growth of the company’s net profit. Annoqi said that due to the slight increase in prices of acrylonitrile and p-nitroaniline, the main raw materials for disperse dyes, and the significant price increases of main raw materials for intermediates such as pure benzene, net profits have declined.
In 2021, Zhejiang Longsheng dye sales hit a record high for the same period in history. The semi-annual report shows that in the first half of the year, the company’s dye output was 121,600 tons, and its sales volume was 129,500 tons, a year-on-year increase of 35.2% and 38.4% respectively. Zhejiang Longsheng said that in the first half of the year, domestic and foreign market demand continued to pick up, and the economic recovery trend of the downstream printing and dyeing industry was further consolidated. The output of printed and dyed fabrics increased significantly compared with before the epidemic, thus driving the steady improvement of the dye sales market. However, it is worth noting that the company’s dye products saw significant price cuts in the first half of the year, with the average price being 36,300 yuan/ton, a year-on-year decrease of 11.4%.
The same problem also occurs with Runtu Shares. The semi-annual report shows that the company achieved total operating income of 2.76 billion yuan in the first half of 2021, a year-on-year increase of 21.6%, but the net assets attributable to shareholders of listed companies fell by 1.44% year-on-year. Runtu Co., Ltd. frankly stated in its semi-annual report that in the first half of 2021, driven by the continued recovery of domestic and foreign market demand, the quality and efficiency of industry operations have accelerated. However, due to the adoption of backward production processes by some small businesses, it has had a certain impact on the market, ” The trend of rising volume and falling prices has not yet been reversed.
Actively respond to cost pressures
Some industry experts believe that next yearIn 2020, dye costs will continue to rise driven by rising prices of bulk raw materials, which will undoubtedly make things worse for the dye industry, which is currently under great operating pressure.
Faced with increasing cost pressure and price fluctuation risks, Annoqi said that while focusing on the main dye business and consolidating its advantages, it will continue to deploy the big digital industry and cultivate new engines for the company’s development. , continue to promote the strategic layout of big digital. Recently, Annoqi has been actively investing in the industry chain, investing 22.5 million yuan in Magic Weiwei, and signing a strategic cooperation framework agreement. The two parties will invest in brand promotion, domestic consumer goods, digital printing, fabric dyeing solutions, and e-commerce platform operations. Carry out in-depth cooperation.
Zhejiang Longsheng stated in its semi-annual report that the company will take advantage of the scale of intermediates, combine DSS + digitalization to enhance product competitiveness, and at the same time use existing R&D and manufacturing platforms to cultivate new products. The company will focus on the construction of dye production supporting projects, and is committed to a series of tasks such as production capacity improvement, quality improvement, and process optimization. At the same time, it will increase the safety management of the production process and accelerate the construction of digital factories, so that the company’s dye production and sales can be further improved.
In response to the tight supply and large price fluctuations in the dye intermediate market in recent years, Jiangsu Jinji Industrial Co., Ltd. said that it will select appropriate stockings based on sales orders, inventory and market prices to reduce the raw material market The impact of fluctuations on the company’s normal production and operations. For other auxiliary raw materials, the company mainly purchases according to the production plan. When selecting suppliers, the company will focus on factors such as product quality, production stability, reputation and price.
As for the future trend of dye prices, Runtu Co., Ltd. pointed out that as the national safety and environmental protection situation continues to be stricter, on the one hand, it will affect the supply of upstream raw materials, and on the other hand, it will lead to large fluctuations in product prices. This fluctuation may Fluctuations may be positive or negative, thus affecting the company’s performance. The company will adopt flexible countermeasures, timely study and judge market and industry trends, timely adjust policies and procurement and sales strategies, control various costs to the maximum extent, and achieve due economic benefits. </p
