In December 2021, the “suspension” of 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, 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?
DyeDemand is lower than expected
Zhejiang is a strong province in the dye industry in China, and the Shangyu area is the 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. In this context, 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 of the dye industry. 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 expected.” Junfang pointed out that in the face of complex and ever-changing domestic and foreign environments, the industry’s economic recovery still needs to be fully restored. Due to restrictions, the rebound in domestic and foreign consumer demand has weakened, and the off-season atmosphere in the textile market has become increasingly intense. At present, printing and dyeing companies in Guangdong, Jiangsu, Zhejiang and other places have issued Spring Festival holiday notices. The holiday times are distributed between early January and mid-January. Some of them have holiday dates. About a week earlier than in previous years.
The printing and dyeing market has tailed off at the end of the year
However, just recently, the printing and dyeing industry has experienced 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 previous years’ practice, our holidays are basically 7 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 Arrange employees to stick to their posts during New Year’s Day and work overtime to produce.” Hu Xiaorang, deputy general manager of Zhejiang 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. According to data from China Silk City Network, the operating rate of printing and dyeing factories increased slightly to 72.3% in early January. 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.
2The Spring Festival is approaching, and the market has always said that “every festival must 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?
A person in charge of a printing and dyeing company in Zhejiang said that last year’s raw material prices were 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 has gradually increased. Recovery, the printing and dyeing market is expected to be generally stable in the first quarter. The China Printing and Dyeing Industry Association stated 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.
Main operating efficiency indicators of printing and dyeing enterprises above designated size in 2021
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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