Dyestuffs and Organic Pigment Face Challenge

By Tian Liming

  Rapid growth of output

According to statistics from the China Dyestuff Industry
Association (CDIA), the product sales revenue realized in 2006
was RMB31.092 billion (including dyestuffs and organic
pigments), an increase of 6.7% over 2005. The profit was RMB2.062
billion (including dyestuffs and organic pigments), an increase
of 3.2% over 2005. Export-oriented companies improved
remarkably in economic performance.
    The output of bulk products in the textile industry saw
stable growth in 2006. However, the growth of output was slower
than that in 2005. The dyestuff market was saturated in 2006,
with the output growth of dyestuffs apparently higher than the
growth of demand and market competition fierce. In spite of an
increase in the economic performance of the dyestuffs and
organic pigments sector, growth dropped somewhat. The margin of
major producers increased remarkably in 2006 through their
efforts in adjusting product portfolio, improving product
quality, accelerating new product development and expanding the
market.
     According to statistics from CDIA, the output of dyestuffs
in China was 699.3 thousand tons in 2006, an increase of 9.1%
over 2005. The figure is much lower than the output of 1.2853
million tons as provided by the National Bureau of Statistics
of China mainly because the China Dyestuff Industry Association
only collected statistics of the output of its member
enterprises. The output of organic pigments was 182.6 thousand
tons, an increase of 16.6% over 2005. The output of both
dyestuffs and organic pigments in 2006 hit an all-time high.
Major producing provinces and municipalities included Zhejiang
province, Jiangsu province, Shanghai and Tianjin.

  Exports increased rapidly  

According to statistics from the General Administration of
Customs, China's total exports of various dyestuffs were 251.6
thousand tons in 2006, an increase of 8.7% over 2005 and setting
a new record. The total export value of dyestuffs reached US$804
million, an increase of 6.4% over 2005.
     In spite of a negative growth in basic dyes and disperse
dyes, the export value of various dyestuffs maintained its
stable growth in 2006.
     The export growth of reactive dyes were highest among
various dyestuffs, reaching 33 754.1 tons in 2006 - an annual
increase of 53.1%, a remarkable 37 percentage points higher than
the growth rate during 2005.
     The export of disperse dyes continued to hold first place
among dyestuffs, accounting for 35.2% of the total volume.
However, both the amount and value of disperse dye exports in
2006 dropped for the first time in the past ten years.
     The export of indigo dyes decreased drastically after a
rapid growth in the past two years, and the export of vat dyes
was therefore down remarkably in 2006.
     China exported dyestuffs to 120 countries and regions in
2006, being 3 fewer than 2005. The amount exported to the top
10 countries and regions was 161.5 thousand tons, accounting for
64.1% of the national total, and the export value was US$484
million, accounting for 60.5% of the national total. The volume
exported to Korea, the United States, Hong Kong and Japan saw
a declining trend in 2006, while the amount exported to Turkey,
Bangladesh, Pakistan, India and Indonesia increased
considerably.
     The export of organic pigments from China maintained stable
development in 2006. The exported amount reached 138.6 thousand
tons (including pigment products such as coatings, printing
paste and color masterbatch), an increase of 20.9% over 2005.
The export value was US$620 million, an increase of 24.9% over
2005. As the value of exports grew 4 percentage points faster
than the volume, the export performance continued its improving
trend. The competitive edge of organic pigments in China has been
enhanced in recent years.
     China exported organic pigments to 111 countries and
regions in 2006, being 4 more than 2005. The United States and
Germany have been the leading countries importing organic
pigments from China for many years, and their amount importing
from China continued to increase stably in 2006, accounting for
22.3% of the total.

  Imports rose steadily

The growth rate of China's dyestuff imports declined gradually
in recent years. The growth was 9.4% in 2003. After that, growth
slowed and finally turned negative in 2005. It was not because
of reduced market demand, but because the rapidly developing
dyestuff sector in China was able to replace partial import
products.
     Both the volume and value of dyestuff imports saw overall
growth in 2006. China imported 67.6 thousand tons of dyestuffs,
a rise of 4.7% over 2005, and the value increased 11.8% to US$398
million.
     The imported amount of reactive dyes still held first place
among various dyestuffs, reaching 30.5 thousand tons in 2006,
a rise of 7.0%. In addition, the imported amount of acid dyes
and direct dyes saw continued rapid growth.
     China imported dyestuffs from 51 countries and regions in
2006, being 1 fewer than in 2005. Korea and Taiwan province were
the leading sources of China's dyestuff imports, accounting for
38.7% of the total.
   The imported amount of organic pigments increased rapidly in
2006, reversing the decline in each of the three preceding years.
China imported 34.3 thousand tons of organic pigments, a rise
of 10.0 % over 2005, and the import value increased 19.8% to
US$206 million.
    China imported organic pigments from 51 countries and
regions in 2006, being 9 more than 2005. Exporters to China that
experienced considerable growth included Korea, Britain,
Germany and the United States.


  Slowdown development in 2007

The present stable economic growth will promote further
development of dyestuff and organic pigment sector in 2007.
However, the sector will still face more challenges. The REACH
Act of the EU was implemented on June 1st, 2007, and produces
a great impact on China's exports of dyestuffs and organic
pigments. In addition, textile trade friction, the constant
increase of antidumping actions and price increases of energy
and raw materials will together place great pressure on the
development of the dyestuffs and organic pigment sector, so a
slowdown is expected in 2007.

Table 1  Output of Major Dyestuff Producers in 2006
          (t)
Producer                                              Output
Zhejiang Longsheng Group Co.                        175 618
Zhejiang Runtu Chemical Group Corp.                    91 790
Wuhan Dyestuff Plant       &