China Dyestuff Industry Association

From January to June, major economic indicators such as dyes & pigments, intermediates, and printing and dyeing auxiliaries have all fallen by a large margin and the profitability of enterprises has dropped significantly on the back of factors like weakened domestic and overseas demand, lowered operating rates, decreased products prices or processing fees and increased various costs. The whole industry is under heavy pressure due to the pandemic.
   Along with the improvement of the prevention and control of the coronavirus, the rate of production resumption continues to increase, and the government's favorable policies on the industry continue to show practical results, the operating conditions of dye companies will hence improve in the second half of the year, and the operation of the dye industry is expected to rise under pressure.

Industry economic indicators on a downward trend

   In the first half of the year, the main operating indicators of the dye industry showed a negative growth trend. From January to June, the total industrial output value was RMB22.13 billion, a year-on-year decrease of 8.1%; the cumulative sales revenue was RMB19.21 billion, a year-on-year decrease of 18.3%; the cumulative total completed profits and taxes were RMB2.69 billion, a year-on-year decrease of 42.1%.
   From January to June, the total production of various dyes was 317 812 tons, a year-on-year decrease of 12.9%. Among them, organic pigments (incomplete statistics) was 59 972 tons, a year-on-year decrease of 5.1%; intermediates 156 778 tons, a year-on-year decrease of 11.3%. With the normalization of the prevention and control of the coronavirus, the supply of basic raw materials and intermediates for dye production has gradually recovered, the costs of labor, logistics, and epidemic prevention and control have also stabilized, and the operating rates have effectively increased.

Export market not optimistic

   The coronavirus pandemic has restricted the plants utilization in the first quarter. Since late March, the overseas orders have dropped sharply, and the export situation of the dye industry was severe.
   From January to June, China’s total export of dyestuffs was 92 000 tons, a decrease of 16.9% from the same period last year; cumulative export earning was US$610 million, a decrease of 28.1% from the same period last year; cumulative imports of dyes were 18 000 tons, a decrease of 18.9% from the same period last year; and the foreign exchange consumption of imports was US$150 million, a year-on-year decrease of 25.1%, as shown in Table 1. There are still many uncertainties in international trades, and exports are not expected to rebound strongly in the second half of the year.

   From January to June, the export amount of organic pigments and products reached 64 000 tons, a year-on-year increase of 4.4%; the export value of organic pigments and products was US$490 million, a year-on-year decrease of 2.6%. The export volume in March increased the most, by 28.8%. The amounts were decreasing in other months. See Table 2 for details.

   Most of China's dye exports are disperse dye and reactive dyes. Judging from the overall situation, the export amounts of most varieties have declined, especially disperse dye and indigo. Additives also decreased year-on-year, but the figure of optical brighteners increased slightly. See Table 3 for details.

   China exported dyes to 93 countries and regions from January to June 2020, 11 less than the same period last year. Most of China's dye exporting destinations are in Asia, with the top three Pakistan, South Korea and Indonesia. In the first half of the year, export amounts to Indonesia and South Korea dropped significantly. The export volumes to the top ten countries and regions totaled 67 000 tons, accounting for 72.8% of the total; the foreign exchange earnings reached US$410 million, accounting for 67.2% of the total.
   From January to June, China’s organic pigments and products were exported to 133 countries and regions, a decrease of 6 from the same period last year. Among the top ten export destinations, the largest growth was to the US, up by 44.9%, and the only decrease was to Vietnam. The export volume of organic pigments and products to the top ten destinations was 36 000 tons, accounting for 56.2% of the total; the foreign exchange earnings from exports were US$270 million, accounting for 55.1% of the total.

Import fell with the largest decline in May

   From January to June, China imported 18 000 tons of dyes, a decrease of 18.9% compared with the same period last year, with the plummet in May hitting 54.8%. The foreign exchange consumption was US$160 million, a decrease of 23.7% YoY. See Table 4 for details.

   From January to June, the total import of organic pigments and products was 12 000 tons, down 3.5% from the same period last year; foreign exchange consumption was US$140 million, down 26.1% YoY. The import volume fell the most in May, with a year-on-year decline of 45.4%. The figure was going up from January to March and then falling in other months. See Table 5 for details.

   Most of the imports in the first half of 2020 were reactive dyes and acid dyes, in the field of high-end products. Among them, the import volume of reactive dyes was 5 363 tons, accounting for 29.1% of the total; and the figure of acid dyes was 4 688 tons, accounting for 25.4% of the total. The import amount of disperse dye and indigo increased significantly, by 27.1% and 73.3% respectively year-on-year; that of optical brightener decreased by 33.1% compared with the same period last year, with the foreign exchange consumption fell by 41.9%; and the figure of additives dropped by 17.5%. See Table 6 for details.

   China imported dyes from a total of 33 countries and regions from January to June, the same as the same period last year. India and Taiwan are still the main dye suppliers to China. Importing amount from South Korea fell the most, by 54.2%. Meanwhile, importing volume from Singapore, Germany, and Spain have all increased. Singapore has the largest increase of 170.7%, with the total volume still limited. The imports from the top ten countries and regions reached 17 000 tons, a year-on-year decrease of 20.4%, accounting for 94.4% of total; the value of imports was US$140 million, a decrease of 24.4% over the same period, accounting for 93.3% of total.
   From January to June, China imported organic pigments and products from 48 countries, 2 more than the same period of 2019. The amount from Myanmar increased by 319.5%, but the absolute volume was only 221 tons. The amount of imports from India increased by 14.5% year-on-year. The organic pigments and products import volume from the top ten origins was 11 000 tons, down 2% year-on-year, accounting for 91.7% of the total; the organic pigments and products import value from the top ten origins was US$ 130 million, a decrease of 26.2%, accounting for 92.9% of the total.

Market forecast for the second half of 2020

   The domestic and international situation faced by China's dye and pigment industry will be more complicated and severe in the second half of 2020. In order to reduce the impact of Covid-19, the top priority is to consolidate and stabilize traditional markets and major customers, strive to explore new markets and demands, stabilize the supply chain, expand the product chain, continuously improve product performance and quality stability, and deepen the upstream and downstream collaboration.
   The dye and pigment enterprises should accelerate the development of new technologies for energy saving and emission reduction, adopt digital, automated and intelligent new equipment, promote industry transformation and upgrading, and optimize industrial layout; should strengthen technological innovation, independent innovation, and produce differentiated and high value-added new products; should develop towards a more environmentally friendly, efficient and sustainable direction.