The Shaoxing epidemic has a relatively large impact on our dye industry. Due to the uncertainty of the epidemic, it is still unclear when the dye giants, which have stopped production one after another since the 9th of this month, will unblock production. However, due to the need for a unified suspension of production due to epidemic prevention, and facing the year-end holiday, it is very likely that there will be a history of production suspensions as long as 2-3 months. Take a look at the report below
According to statistics: From 00:00 to 24:00 on December 20, 2021, there were 8 new confirmed cases in Shaoxing City, all in Shangyu District. Since December 7, as of 24:00 on December 20, a total of 383 confirmed cases have been reported in the city, including 380 cases in Shangyu District and 3 cases in Yuecheng District. (Data as of 24:00 on December 20)
According to the regulations of the epidemic prevention department, if there are no new infections or cases within 14 days for 14 consecutive days, then these natural villages and communities can be lifted as a whole.
If there are no confirmed cases in the future, starting from today, the lockdown will not be lifted until the 10th of next month. In addition, the Chinese New Year is relatively early this year, and the Lunar New Year is at the end of January. Even if the lockdown is lifted before the Chinese New Year, normal dye production will no longer be possible. This means that the shutdown time may reach a historical record of 2-3 months, which will inevitably cause a contradiction between supply and demand.
Based on interviews and surveys of large dye companies, although it was previously believed that overcapacity in local disperse dye production led to frequent closures of companies in the industry, observations revealed that more closures were caused by environmental and safety compliance issues of some small foreign companies, including A shortage of funds, substandard quality and technology, and an increase in production costs have caused production to be blocked and shut down, rather than overcapacity.
According to the current market quotation, the price of dispersed black ECT 300% before the epidemic was 23 yuan-24 yuan/kg. However, due to the suspension of production by major dye giants, coupled with the dispersion of 70% of domestic production capacity and 50% of reactive dyes, All are produced in Shangyu, Shaoxing. Due to this reason, expectations have been significantly raised. At present, the dye category has begun to rise, with an increase of 26-28 yuan/KG.
It is reported that: On December 11, Zhejiang Longsheng announced that due to the epidemic, it had gradually reduced production and temporarily suspended production in an orderly manner on the 9th! The subsidiary located in Shangyu Economic and Technological Development Zone, Hangzhou Bay, Zhejiang Province currently mainly produces chemical products such as dyes, chemical intermediates, and water reducing agents.
On December 14, Zhejiang Runtu also issued a notice to suspend production due to the epidemic! All subsidiaries, including those located in Shangyu Economic and Technological Development Zone, Hangzhou Bay, Zhejiang Province, mainly produce dyes, auxiliaries and chemical raw materials.
According to observations, the current shipments of local dye giants are mainly based on inventory, and contract signing and quotations have been suspended. It is expected that there may be a wave of price increases after the lockdown is lifted. Downstream printing and dyeing enterprises or dealers should prepare their supply.
Discontinuation notice
Listed companies in many places in Zhejiang have issued production suspension announcements.
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