Driven by the increase in upstream dyes, fabrics and labor costs, some printing and dyeing manufacturers in Shaoxing have announced a slight increase in printing and dyeing prices after the holiday. The price range for sensitive colors such as red and blue is 0.5 -about 1 yuan/kg. Previously, Fujian’s printing and dyeing industry has implemented a unified price increase on dyeing fees since February 7, to 3,000 yuan for less than 30 yards per gram and 2,000 yuan for more than 30 yards per gram. Analysts pointed out that due to the impact of rising costs and the fact that March to May is the traditional peak season for textiles, it is expected that more printing and dyeing manufacturers will not rule out price increases in the future.
Soaring raw materials drive up prices
Judging from the manufacturer’s price increase notice, the reason for the price increase comes from the recent rising costs of labor, dyes, fabrics, etc.
In terms of raw materials, many upstream companies have raised the prices of polyester raw materials after the holiday. PX, MEG and PTA have increased by hundreds of yuan/ton. Affected by the upstream, the price of spandex has increased by about 2,000 yuan/ton. At the same time, the price of viscose staple fiber has exceeded 14,000 yuan/ton, and the price of polyester staple fiber has also increased by about 300 yuan/ton.
In terms of cotton, external prices increased during the Spring Festival. After the holiday, the price of Zheng cotton once exceeded 16,000 yuan/ton. It is understood that the current price of Xinjiang cotton in mainland warehouses is about 300-400 yuan/ton higher than before the holiday. As textile and garment factories start operations one after another after the holiday, a new round of inventory replenishment is coming. The tight supply in the spot market also makes cotton prices expected to rise further.
In terms of dyes, affected by multiple factors such as cost, environmental protection, supply and demand, the ex-factory price of mainstream dispersed black products rose to 26 yuan/kg on February 5, an increase from the previous month 3 yuan/kg, an increase of 13%. It is understood that the inventory of dye manufacturers is currently at a low level, and there is still a certain price increase expected in the future.
The printing and dyeing industry is different from the upstream and downstream industries. It is difficult to prepare goods in advance to cope with cost fluctuations. Therefore, rising raw material prices directly prompt printing and dyeing manufacturers to start raising prices.
Performance improvement in printing and dyeing sector
At present, only Runtu Co., Ltd. in the printing and dyeing sector has announced its 2016 performance. The company stated that due to the decline in product prices caused by sluggish downstream demand, the company achieved total operating income of 4.321 billion yuan in 2016, a year-on-year decrease of 4.43%; net profit of 686 million yuan, a year-on-year decrease of 6.49%; basic earnings per share was 0.89 yuan.
However, judging from the current situation, printing and dyeing companies are relatively optimistic about the recent market conditions. Annoqi said in an investor survey on February 7 that the price of dye products has increased since January this year, and the company still expects product prices to rise in 2017.
Annoqi also revealed that inventory has decreased recently. The main reason is that with the arrival of the peak printing and dyeing season after the holidays, the demand for dyes has increased. The recent rebound in dye prices has prompted downstream printing and dyeing manufacturers to prepare bulk supplies in advance. The sales price of dyes in January 2017 was higher than the same period last year.
The company stated that in the next few years, its dye sales volume will continue to increase, and its market position in the main dye business will be further improved. In the company’s diversified development strategy of e-commerce, digital, environmental protection and new materials, projects and businesses such as the operation of Qicaiyun e-commerce platform, digital ink and nozzle projects, sewage treatment projects, and new material research and development will achieve rapid development. On the basis of refining and strengthening its main dye business, the company will use capital market resources to expand the company through the development of related diversified industries.
In addition, some analysts pointed out that the current price of dyes is at a historical low, and manufacturers have a strong willingness to increase prices. Generally speaking, textile, printing and dyeing and other fields will usher in a peak demand season in the second quarter. Judging from prices over the years, dye price increases in the second quarter are universal.
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