The demand for dyes in the textile printing and dyeing industry accounts for about 93% of the total demand for dyes, while other areas such as leather dyeing and paper dyeing account for less, and the textile and apparel industry boom directly affects dye demand. In the textile and apparel industry represented by the dyeing and printing of textiles, polyester filaments account for the largest proportion and have a rigid demand for the dye industry.

China is the largest textile producer and exporter. The output value of the textile industry accounts for approximately 15% of China's total economic output value. The stable development of the textile industry is a prerequisite and guarantee for the sustained and steady growth of the dye industry in China. The data shows that in 2016, China's dye production reached 928 thousand tons, and it maintained a positive growth for eight consecutive years. Production accounted for about 70% of the world's total production, and apparent consumption was about 700,000 tons.

Textile and apparel, as an important end demand for the textile industry, ended the three consecutive years of negative revenue growth in 2017. Revenue increased by 6.9% year-on-year, total textile and apparel profits increased year-on-year, and textiles, garments and apparel industry exports in recent years. The delivery value showed a pick-up trend in 2017. The recovery of the textile and apparel industry led to a stable growth in demand for the dye market.

The printing and dyeing industry ushered in supply-side reform after 2012, accelerating the elimination of backward production capacity in the printing and dyeing industry. The overall industry output growth rate showed a negative growth to the end of 2015, while in 2016, as the leading enterprises upgraded their facilities, the output growth rate turned negative. In the first half of 2017, the national output of printing and dyeing cloth was 27.172 billion yuan, an increase of 6.14% year-on-year, driving demand for dyes.

As the world’s largest dye exporter, China’s dye exports account for about 28% of total output. According to the "Dye Industry Production and Sales Demand and Investment Forecast Analysis Report" released by the Industry Research Institute of the Foresight Industry, the export volume of dyestuffs in China was 257,700 tons in 2017, a slight decrease of 0.72% over the previous year. Disperse dyes, vat dyes, reactive dyes, sulfur dyes and other varieties are the major export varieties. Among them, the vat dye is mainly used as the reducing indigo of denim fabric dyeing and finishing materials, and the reduction of indigo blue is 84.34% of the total amount of the vat dyes; the sulphur dyes are mainly based on the low price, excellent cotton dyeing ability and high cost performance Sulfur black exports accounted for 85.43% of the total exports of sulphur dyes.

With the involvement of Longsheng, Bauxite and other leading enterprises in high-end dyes, China’s dependence on overseas imports of high-end dyes has dropped significantly. Only a small amount of dyes are still imported. Since 2006, the annual import of dyes has been halved, from 68,000 tons in 2006 to 32,000 tons in 2016. The import volume in 2017 was 39,000 tons, which was an increase of 23.4% year-on-year. We believe that the increase in import volume in 17 years is the result of a resonance between domestic dye price increases and overseas production capacity competitiveness. Due to relatively limited imports, short-term impact on the industry is small.