Stepping into traditional peak season for textile industry, printing and dyeing industry also welcomes a small buoyant season. It is heard that after dyeing fee increases in Jiaxing on Sep 1, part of dyeing plants in Shaoxing also revises up the prices from Sep 9. On Sep 12, Hangmin Stock, as a leading enterprise in printing and dyeing industry, elevated the dyeing fee of above 0.10yuan/m for all varieties.
Since 2015, dyeing costs continue to rise frequently, especially in the traditional peak season, dyeing fee is bound to see large increase. The reasons are analyzed from two aspects.
1. Environmental protection rectification
After printing and dyeing industry implemented New Environmental Protection Law, Discharge Standard of Water Pollutants for Dyeing and Finishing of Textile Industry and Emission Standard of Air Pollutants for Dyeing and Finishing of Textile Industry in 2015, local governments started to rectify printing and dyeing plants. Some plants with large energy consumption or those cannot reach the standards are requested to be closed or curtail production. Especially in 2016, due to G20 Summit in Hangzhou, the regulations on the dyeing industry were stricter and the printing and dyeing plants in Shaoxing and Xiaoshan were affected the most. In early 2016, 74 printing and dyeing plants were closed in Shaoxing and then 65 plants shut down in Xiaoshan. The shutdown in Xiaoshan and Shaoxing posed significant impact on the whole printing and dyeing industry as printing and dyeing capacity in these two regions accounted for about 44% in total China. The shutdown also resulted into sharp rise of dyeing fee. Besides, the rectification also makes dyeing plants transform and upgrade, leading to higher input investment and dyeing fee.
2. Dyestuff prices tick up
In China, disperse dyestuff and reactive dyestuff sees the largest output, with a proportion of nearly 80% nationwide. In the first quarter of 2016, trading prices of disperse black ECT300% and reactive black WNN200% declined to 17,000-18,000yuan/mt and 19,000-20,000yuan/mt respectively, but in the beginning period of second quarter, with coming traditional buoyant season and high intention to refill stocks, dyestuff prices soared, but later, as the market cooled down, prices declined to 25,000yuan/mt. From Jan to Aug, the increment of disperse black ECT300% approached 47% and that of reactive black WNN200% reached 25%. It is known that dyestuff accounts for about 20% in printing and dyeing costs. With the surge of dyestuff prices, the pressure on dyeing plants increased. To transfer the costs, dyeing plants are forced to elevate the dyeing fee in peak season.
In general, the continual rise of dyeing fee since 2005 is mainly attributed to the pressure brought by the environmental protection rectification and the higher dyestuff costs. In the meantime, one indispensable condition is the demand from downstream sector. In traditional peak season, printing and dyeing plants seek the opportunity to elevate the dyeing fee, while in slack season, dyeing fee also moves lower due to weak demand and lower dyestuff price.
Looking from the dyeing fee in 2016, it is picked up mostly during Mar and Apr in peak season and stepping into Sep, it rises further. In the rest of time of slack season, dyeing fee falls down. So in general, the increment of dyeing fee is not that large as anticipated. According to our survey, Xiaoshan and Shaoxing witnesses largest increment of 10-15% compared to early 2016 due to G20 Summit, and the increment in Huzhou and Jiaxing is around 8-15%. While in Jiangsu, the dyeing fee remains flat basically as the business activities are unfavorable this year. In Oct, dyeing fee in some regions with good business activities is likely to go up again.