Dye price increase industry chain recovery

Environmental pressures have limited production capacity. Coupled with the catalysis of the recovery of the textile industry, the economy of the dye industry continues to rise. Disperse dye prices have risen to RMB 30,000 per ton from last year's low of RMB 16,000, a rate of 87.5%; and At the same time, as the printing and dyeing industry downstream of the dyes, the degree of prosperity has also improved and the profitability has improved significantly.

According to reports, the recovery of the printing and dyeing industry is mainly affected by three factors: First, the printing and dyeing industry to pass the cost of strong ability, this year, mainstream printing and dyeing manufacturers generally raise prices many times, not only to smoothly digest the rising pressure of dyes, while coal and other costs decreased, but to enhance the enterprise Gross profit rate; Second, textile and apparel demand improved, driving up printing and dyeing orders; Third, outdated production capacity was eliminated. Due to heavier pollutants discharged by printing and dyeing, the Ministry of Industry and Information Technology continued to compress backward production capacity this year, and the first backward production capacity was eliminated in the second half of July. In China, printing and dyeing companies eliminated a total of 2.34 billion meters, accounting for about 4% of the total production capacity. The consolidation efforts are expected to exceed expectations. The printing and dyeing industry has benefited from the elimination of backward production capacity and the smooth increase in price to pass on the cost of dyes. The gross profit margin level is expected to increase further.

Accelerate the elimination of backward production capacity to release market space On July 30, the Ministry of Industry and Information Technology issued an announcement on the admittance of printing and dyeing enterprises in 2013 and decided to work with the Ministry of Environmental Protection to carry out the 2013 access management work for printing and dyeing enterprises. While sharply increasing the access conditions, the elimination of backward production capacity is also stepping up. On July 25, the Ministry of Industry and Information Technology issued the list of the first batch of eliminated enterprises that were eliminated in 2013, and more than 130 dyeing and dyeing enterprises eliminated 2.34 billion meters of backward production capacity in total. From 2010 to 2012, the country has also gradually released the backward production capacity elimination plan for the printing and dyeing industry, among which about 3.8 billion meters will be phased out in 2010, about 2 billion meters will be phased out in 2011, and about 3 billion meters will be phased out in 2012. The average phase-out will account for the total production capacity of the year. About 5%.

Due to the increasingly serious environmental problems, the current government is determined to severely deal with environmental pollution. Small printing and dyeing enterprises with serious pollution will gradually withdraw from the market, while powerful companies have the ability to digest rapidly growing industry operating costs and gain space for development.

On the whole, the printing and dyeing industry is currently in a stable growth period. If the follow-up maintenance of the existing rectification efforts is conducive to optimization of the industry's production capacity structure, at the same time, the elimination of outdated production capacity and the steady growth in the demand for printing and dyeing cloth will also bring about a certain amount of market growth. Leading companies with competitive advantages will share this market share, adding strength to the performance increase.

Successfully digested cost pressures Profitability enhanced the ability of printing and dyeing companies to transfer costs. This round of dye price increase has been successfully digested. Hangmin shares (600987, stocks) said on the 12th on the Shanghai Interactive e-platform, the company's printing and dyeing products in the first half of the cumulative The price is three times and the cost increase factor is successfully digested. According to the agency's calculation, the cost of dyes and auxiliaries currently accounts for about 25% of the total cost of printing and dyeing companies, while the coal price, which accounts for 30% to 40% of the cost, has fallen by more than RMB 200/ton from the beginning of 2012 to a drop of 25%. In response to the price increase of dyes, downstream printing and dyeing companies have realized cost shifts by increasing the price of printing and dyeing products, and their profitability has continued to increase.

From the perspective of the terminal product cost ratio, whether it is dyes or printing and dyeing, the cost of the final product is relatively low, so the garment home textile enterprises are more tolerant of the price increase of upstream raw materials. This also shows that the dye-printing and dyeing-textile apparel industry chain has a smooth price increase, and the price increase base is firm, and the printing and dyeing business boom is expected to continue.