Dyestuff Sector’s Transformation, Upgrading and Product Structure Adjustment Become Urgent

China Dyestuff Industry Association

1. Brisk development uninterrupted in 2014

The dyestuff sector in China was not affected by the overall slowdown of the nation’s economic growth in 2014. Development remained brisk, and both the output and the sales volume grew considerably YOY. The total output of dyestuffs and pigments was 1.149 million tons, an increase of 3.8%. The output of dyestuffs alone was 917 kt, an increase of 2.5%. The total industrial output value was RMB57.18 billion, an increase of 19.7%. The total sales revenue was RMB53.85 billion, an increase of 16.7%. Table 1 shows the major economic indexes of dyestuffs and organic pigments in China during 2010-2014.
Overall, business was good for dyestuffs, pigments, intermediates and dyeing/printing assistants in China. By a number of measures, the dyestuff sector hit historical highs. The main reasons were: (1) With the improved standard of living, the dyestuff sector was called upon to provide dyes with great many varieties and brilliant colors. The development of plastics, coatings, cultural and educational supplies and construction materials greatly boosted the growth of demand for high-grade dyestuffs and pigments, improving the textile market and developing the dyestuff sector. (2) After a market slowdown for several consecutive years, prices of dyes took a rapidly rising track from the beginning of 2013, and gross profits improved. (3) The laws to protect the environment forced some enterprises whose precautions were not up to standard to reduce or suspend production.

2. Output had a slight growth

The output of various categories of dyes maintained an overall balance and grew slightly in 2014. The output of disperse dyes and direct dyes increased. Among the major categories of dyes, the biggest output and export volume was seen for disperse dyes. After rapid increases in both the output and the price of reactive dyes in 2013, an understandable slowdown in growth of these measures occurred in 2014. Still, the scope of applications of reactive dyes expanded. The processing of cashmere, wool and silk yarns consumed a rapidly growing proportion of the total output of reactive dyes, and new markets opened up. Figure 1 shows the output of various categories of dyes in 2014 compared with the previous year.

Table 1    Major economic indexes for dyestuffs, 2010-2014  (kt)

Year    2010    2011    2012    2013    2014    Average annual growth (%)
Total sales revenue (RMB billion)    39.55    41.72    42.60    46.18    53.85    8.0
Total profit and tax (RMB billion)    4.23    4.10    4.16    6.188    9.63    22.8
Output of dyestuffs    756    772    833    895    917    4.9
Output of organic pigments    224    210    210    211    232    0.9
Output of intermediates    215    229    313    308    287    7.5



3. Export activity declined

The export of dyestuffs from China had long maintained a steadily rising trend. Last year however, the volume of dyestuffs exported was only 271 kt, a drop of 6.5% from the previous year. Only the export amount of indigo blue increased by 5.8%. The declines in disperse dyes (the class with the biggest output) and reactive dyes were 8.3% and 4.6%, respectively. Among the top 10 export destinations, only Vietnam increased its import volume. The amounts exported to Korea and India were 17.1% and 19.9% lower than in the previous year. There were two main reasons: the global output of dyestuffs was growing year by year, generally saturating both domestic and overseas markets; due to price fluctuations, traders were not confident forecasting prices of imported dyestuffs, so they sold down inventory to minimize risk.
Although the export volume was down, the total export value was much higher, reaching US$1.81 billion, an increase of 21.6% over the previous year. The increase of the export value was driven by the sustained rise of dyestuff prices in past years.  
Over one-third of China’s output of dyestuffs was exported last year, showing that the dyestuff sector was heavily dependent on the international market. Both the export volume and the export value of organic pigments were higher than in the previous year, whereas the export amount of fluorescent whitening agents and assistants was lower. See Table 2 for details.

Table 2    Changing export of dyestuffs by category, 2014

Category    Export volume (kg)    YoY Growth (%)    Export value (US$)    YoY Growth (%)
Disperse dye    104 468 809    -8.3    735 270 464    21.9
Acid dye    18 874 446    -11.6    161 631 297    24.7
Basic dye    14 545 154    -8.4    110 074 724    12.1
Direct dye    14 713 266    -8.0    62 560 354    22.3
Reactive dye    47 802 405    -4.6    387 218 688    41.4
Vat dye    6 062 512    -13.5    96 121 693    2.4
Indigo blue    30 032 909    5.8    153 187 012    5.6
Sulfur dye    4 395 829    -1.1    14 494 251    12.8
Sulfur black    28 999 118    -8.3    51 477 237    6.3
Others    1 439 353    -1.1    41 310 778    20.8
Total    271 333 801    -6.5    1 813 346 498    21.6
Organic pigment    153 816 072    5.4    1 246 433 288    9.4
Fluorescent whitening agent    39 344 697    -5.4    139 825 934    3.6
Assistant    28 271 259    -10.4    71 672 446    -10.3


4. Enhance competitiveness

China’s dyestuff sector faces uncertainty and challenges. Enterprises should highlight competitiveness-enhancing measures such as strengthening research and development, cultivating product brands, adjusting the export structure and opening new markets. For a considerable period in the future, the export of dyestuffs and pigments from China will still grow slowly.
(1) Adjust product structure
There are various problems in the dyestuff and pigment sector of China, such as low technical level, capacity surplus, product homogeneity and an inadequate proportion of new high-tech products. Accelerating enterprise transformation and adjusting product structure have therefore become inevitable.
Leading dyestuff producers in China have changed their operating tactics in recent years, stripping and reforming production and sales units, and developing product series toward high-grade varieties so that the production and sales of dyestuffs can better keep abreast of market changes. Enterprises should also constantly develop new technologies and new products through strong-strong alliances.
(2) Develop cyclic economy, conserve energy and reduce emissions
The sector still faces challenges and pressures, both in growing and diversifying market demand and in environmental constraints. The most important task for the sector today is to employ clean processes that reduce emissions.
(3) Develop toward high-end production and internationalization
Globalization trends such as transnational production, regional sales and liberalized trade are inevitable in the development of China’s dyestuff and pigment industry.  
(4) Upgrade product technical grade
China is a big producer and exporter of textiles, accountings for over 20% of the world’s total textile export volume.
More and more producers of dyestuffs and pigments will pay great attention to the ecological safety of their products and actively provide downstream enterprises with safe and environment-friendly dyestuffs and pigments, and products with excellent process adaptability, application performance and color-fastness ratings.