Tight environmental protection, backward production capacity orderly eliminated

Tightening environmental policy, the industry higher cost of environmentally friendly production. Dye production process will produce a lot of waste acid, organic waste and other harmful substances. During the "12th Five-Year Plan" period, the biggest problem in the dye industry lies in environmental protection. Due to the low illegal costs, a large number of small and medium enterprises with high energy consumption and high pollution have survived. Since 2017, the "Emission Standards for Dye Industry Pollutants" has been formulated and SMEs are under pressure to make major environmental remediation efforts. In addition, the introduction of a green tax in 2018 sets the stage for enterprises that are not qualified to meet the sewage discharge standards and have backward production technologies to enter or to continue Barriers to production. The above two factors for the dye industry's most important impact is the supply side, accelerate environmental protection substandard capacity to quit.

Dye industry is highly concentrated, the competition pattern is good, good industry leader

Domestic dye industry concentration is higher. By production area, the domestic dye production enterprises are mainly concentrated in Zhejiang and Jiangsu provinces, the two provinces scattered and reactive dye production capacity accounted for more than 80% of the national capacity.

According to the manufacturer, the industry over the past 3 years, disperse dyes and reactive dyes CR3 were maintained at 60% and 45%.

Supply of resorcinol tension, o-chloroaniline anti-subsidy levy will improve the supply relationship

According to HC Chemical Network information, the United States announced in July 2017 Innisphere Park rescheduled permanently resorcinol business, will make long-term resorcinol to maintain a tight balance, the price is expected to run high. According to Zhuo record information, resorcinol prices in 2017 rose sharply about 50%, is expected in 2018 resorcinol prices will remain high, to further support the price of disperse dyes.

According to Sinochem's website statistics, on February 12, 2018, China's Ministry of Commerce ruled that subsidies for the import of o-chloro-nitroanilines originating in India were decided to take countervailing measures against imported o-chloroaniline originating in India , Import products need to pay countervailing duty to China Customs, ad valorem subsidy tax rate of 21.2% -166.8%. O-chloroanitroaniline is an important intermediate for azo-based dyes. It is expected that the collection of countervailing duties will improve the supply and demand of intermediates.

Downstream demand season is approaching, the relationship between dye supply and demand is expected to be improved After the Spring Festival, the arrival of the traditional demand season, printing and dyeing enterprises to enter a new round of replenishment phase, a substantial increase in demand for dyes, dye supply and demand is expected to improve relations.

Investment targets: It is recommended to pay attention to Zhejiang Longsheng, Runtu shares, such as Dye its leading enterprises.

risk warning:

1, as the environmental supervision inspections lower than expected, resulting in non-compliance or sewage non-compliance companies resume production, resulting in significant fluctuations in the prices of raw materials and dye products;

2, due to environmental protection, safety and other factors, resulting in continued decline in operating rates appear;

3, the global economy continued to be lower than expected or the RMB exchange rate fluctuated sharply, leading to the macroeconomic lower than expected decline in the number of exports.