China's Dyestuffs Industry Faces Lower Speed for 2012

By Kang Baoxiang and Wang Lina of China Dyestuffs Industry Association (CDIA)

After experiencing a fast recovering growth in 2010, China's dyestuffs industry performed steadily in 2011 with small growths of economic indexes. The leading companies acquired preferential development and appeared an improved ability of anti-risk while small and medium enterprises suffered a hard situation. Unfavorable factors for 2011 including increased salary, lifted prices of raw materials and auxiliaries materials, enhanced financial costs, soft domestic demand, slack investment, frequently varying exchange rate of RMB caused a narrowing margin for low-end products with the exports growth dropping significantly. In 2012 China's production and import/export of dyestuffs and organic pigments will face huge challenges and the industry will enter into a stage of slower development.   

1. Production in 2011
Data supplied by CDIA showed that China produced 0.98 million tons of dyestuffs and organic pigments in total in 2011, equal to that in 2010. The total production value, sales revenue, output of dyestuffs and output of intermediates in 2011 increased 4.9%, 5.5%, 1.8% and 6.5% respectively over 2010. The profit before tax for the industry and the output of organic pigments fall 3.1% and 6.2% respectively year over year.  

Economic indexes of China's dyestuffs and organic pigments in 2008-2011
Year    2008    2009    2010    2011    Average growth per year/%
Total production value/million RMB    38460    38370    40910    42930    3.3
Sales revenue/million RMB    38240    35650    39550    41720    3.3
Profit before tax/million RMB    3900    3190    4230    4100    3
Output of dyestuffs/thousand tons    678    719    756    770    3.6
Output of organic pigments/thousand tons    185    182    224    210    3
Output of intermediates/thousand tons    135    203    215    229    5.1

2. Difficulties in exports
In 2011 China's exports of dyestuffs and organic pigments suffered strict challenges. Export amount of dyestuffs was 243 000 tons, down 10.7% year over year and export value was US$1.18 billion, an increase of 0.4%. Export amount of organic pigments was 150 000 tons, a drop of 2.7% and export value was US$1.185 billion, up 15.8%. China exported dyestuffs to 112 countries and regions in 2011. Among them, export to Korea was the largest, exports to Indonesia and Chinese Taiwan held the second and the third. Asia is the largest market for China-made dyestuffs.  

Export of Dyestuffs and Organic Pigments in 2011
Variety    Exports/tons    YoY growth/%
Disperse dyes    103429.9    -1.6
Acid dyes    20371.9    -6.8
Basic dyes    14228.9    -10.8
Direct dyes    13293.6    3
Reactive dyes    29875.6    -32.2
Vat dyes    27906    -3.8
   Indigo    20680    -2.2
Sulfide dyes    32515.5    1.2
   Black sulfide    27339.6    -26.9
Other dyes    1885.6    8.8
Total of dyestuffs    243507.3    -10.7

3. Imports went down
With the increasing share of China's dyestuffs industry in the global market in recent years, the nation's import of dyestuff went down year by year. Given the slack domestic demand, China imported 41.9 thousand tons of dyestuffs in 2011 with a year on year drop of 16.5%. Except indigo and black sulfide, all other dyestuffs varieties witnessed a drop in import amount. Chinese dyestuffs makers upgraded their production technologies and improved quality of products, which also replaced some imports. In 2011 China imported dyestuffs from 43 countries and regions and imported pigments from 55 countries and regions.

Import of Dyestuffs and Organic Pigments in 2011
Variety    Imports/tons    YoY growth/%
Disperse dyes    2237.9    -10
Acid dyes    12621.6    -5.3
Basic dyes    878.9    -31.2
Direct dyes    2837.9    -19.8
Reactive dyes    18277.7    -22.3
Vat dyes    1198.0    -23.9
   Indigo    532.7    2376.8
Sulfide dyes    644.1    -37.4
   Black sulfide    421.6    31.4
Other dyes    2760.1    -26.7
Total of dyestuffs    41877.7    -16.5
Organic pigments    19179.7    -17.3

4. To upgrade competitive edge in 2012
Impacted by uncertainties and complications in global and domestic markets, slack demand under the pressure of inflation, China's dyestuffs industry faces serious situation in 2012. Difficulties for dyestuffs makers are larger than that for pigment makers. China's dyestuffs industry has shortages of low technology level, overcapacity for low end products and few innovative products. Cotton price orders from dying/print industry fluctuated largely, which both bring big impact on production, import and export of dyestuffs. Fierce competition on domestic reactive dyes and sulfide dyes market will continue. Chinese dyestuff makers should upgrade their competitive edge through innovation and adjusting structure.