In December last year, the “shutdown” in Shangyu, Zhejiang, an important dye town, triggered the market’s attention to the trend of the dye market. At first, many people in the industry speculated that dye prices were likely to rise significantly. However, as of today, Shangyu dye companies have resumed work and production, logistics and transportation have returned to normal, and dye prices still have not risen significantly. What is the reason behind this situation? How will the printing and dyeing market evolve next?
Demand is less than expected
Zhejiang is a province with a strong dye industry in China, and the Shangyu area is a gathering place for dyeing companies in Zhejiang. The main production areas of Zhejiang Longsheng Group Co., Ltd., Zhejiang Runtu Co., Ltd. and Zhejiang Boao New Materials Co., Ltd. are all here. Relevant data shows that the combined dye output of the three companies in 2020 accounted for more than 53% of the country’s total dye output.
Against this background, Zhejiang Shangyu has been “shut down” for nearly half a month, and the market is expected to have a decisive impact on the upstream and downstream dye industries. However, according to a recent survey of dye companies and their dealers by the Colorful Cloud Dyeing e-commerce platform, individual dye companies outside Shangyu reported a slight increase in dye sales recently, and most dealers reported no dye sales. Not as good as expected, not even as good as the sales in the same period in 2020. In terms of prices, they have remained the same as before the suspension of production, and the prices of some products have even dropped significantly.
Although the suspension of production has increased the attention of the dye industry, there has been no significant change in product sales and prices. In this regard, Jun Fang, director of Qicaiyun E-commerce Media Department, analyzed the reasons. She pointed out that there are many reasons for the stable trend of dye prices. First, after entering the fourth quarter of 2021, dye shipments are smaller and dye dealers have more inventory than the market expected. Second, the contradiction between supply and demand in the dye market is increasing, and the supply capacity of dye companies other than Shangyu is increasing. Third, the production suspension is short-term. Under this situation, most printing and dyeing companies have decided to consume as much inventory as possible without increasing stocking.
“The most important reason is that the demand from printing and dyeing enterprises is not as good as expected.” Juan Fang pointed out that in the face of complex and changeable domestic and foreign environments, there are still constraints on the comprehensive recovery of the industry’s economy. The rebound in domestic and foreign consumer demand has weakened, and the textile market The off-season atmosphere intensifies.
At present, printing and dyeing companies in Guangdong, Jiangsu, Zhejiang and other places have issued Spring Festival holiday notices. The holidays are distributed between early January and mid-January, and some of them have holidays about a week earlier than in previous years.
Industry year-end hike
However, just recently, the printing and dyeing industry has ushered in a small peak in production. Some dyeing factories have reported that business volume has increased significantly and the Spring Festival holiday may have to be postponed.
“According to the practice of previous years, our holidays are basically seven days before the Spring Festival. However, based on the current situation, it is estimated that our order volume will not be completed, so the company arranged for employees to stick to their posts during New Year’s Day and work overtime to produce.” Zhejiang Hu Xiaorang, deputy general manager of Shengfa Textile Printing and Dyeing Co., Ltd., said that the company is currently rushing to produce the order from Thailand that it just received not long ago. It is understood that the company’s production tasks have been fully booked for the first quarter, and the vast majority of them are foreign trade orders.
Zhejiang Huzhou Weida Group Co., Ltd. has even scheduled its production tasks to April. The company’s chairman Yao Zuoqiang said that currently, the company has received orders from world-renowned brands such as Uniqlo, Decathlon, and IKEA. “In 2022, Weida will have dozens of new products waiting to be launched. At the same time, recycled environmentally friendly fabrics will also become the new focus of making the ‘cake’ bigger. The company expects the output value to increase by another 50% on the basis of 2021.” Yao Chu Qiang is full of confidence in the company’s future development.
Data from China Textile City shows that after the New Year’s Day holiday, some sales of woolen fabrics in the traditional market have increased, and the number of varieties for sale has increased. The marketing of creative fabrics in winter and spring continues to be active, and market highlights frequently appear. The number of hanging samples of woven woolen fashion woolens has increased partially, orders for some corresponding varieties have increased and shipments have increased, and the number of transactions in the past few days has increased.
According to data from China Silk City Network, the operating rate of printing and dyeing factories has increased slightly to 72.3%. Among them, there are many dyeing factories that have experienced liquidation. Most manufacturers have an operating rate of about 70%, and a few manufacturers have an operating rate of about 60%.
Regarding the current situation of the printing and dyeing market, some people in the industry said that as the Spring Festival approaches, it is common practice for the printing and dyeing market to start to gradually heat up. However, it is particularly worth noting that due to the impact of the epidemic, many textile companies have seen their orders shrink significantly since the second half of 2021. Therefore, even if there is a “tail-up” trend in orders at the end of the year, there is still a certain gap between the overall market order volume and previous years. This is one of the reasons why the current dye prices are tepid.
The market outlook tends to be conservative
The Spring Festival is approaching, and the market has always said that “every festival will rise”. The Spring Festival is a watershed in the textile market. What will be the market trend of the printing and dyeing industry in the first quarter of 2022?
The reporter interviewed many people in the industry, and most of them were cautiously optimistic about the market outlook.
A printing and dyeing company in ZhejiangThe person in charge of the industry said that the price of raw materials last year was generally higher than in previous years and fluctuated greatly, which had a greater impact on the company. However, with the implementation of a series of measures by the state to deal with the increase in raw material prices, market confidence gradually recovered, and it is expected that the printing and dyeing market trend will be better in the first quarter. Overall stable.
Talking about the market trend of the printing and dyeing industry, Liao Hongying, who has many years of experience in working in textile companies in Ethiopia, Cambodia and other countries, said: “According to the latest “World Economic Outlook” released by the International Monetary Fund, the global economy is expected to grow by 4.9% in 2022. Taken together, , the peak season downturn in the international consumer market has become the norm.”
Liao Hongying believes that in the first quarter of 2022, the market trend is more likely to be worse than expected. “Many international clothing brands are now focusing on digesting inventory, and their purchasing volume has dropped significantly.” She predicted that demand will be in a downturn in February. The market will gradually return to normal in March, and demand may be better than in February, but it is still in the off-season for consumption.
The China Printing and Dyeing Industry Association said that in the face of complex and changeable domestic and international environments, my country’s printing and dyeing industry has continued its recovery trend, with major economic indicators continuing to recover and the economy operating generally stable. But at the same time, there are still many factors of international instability and uncertainty, and there are still constraints on the comprehensive recovery of the industry’s economy. First, the recovery momentum of domestic and foreign consumer demand has weakened; second, the pressure on corporate costs to rise is still high, and corporate profitability will continue to be affected; third, since the fourth quarter of last year, the global epidemic situation has worsened, and new mutant viruses have caused many countries to once again With the announcement of the “national lockdown”, the epidemic situation in my country has also experienced local recurrences, and the textile industry chain and supply chain have been affected. Overall, the printing and dyeing industry is still facing greater pressure to fully recover, and the foundation for the industry’s stable recovery still needs to be further consolidated.
There is no doubt that the direction of the epidemic will still be the biggest variable in 2022. Many industry insiders pointed out that companies need to always pay attention to unexpected factors such as epidemics and weather. These sudden factors will directly or indirectly affect market supply and demand, which will cause the market trend to deviate from expectations.
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