Tens Of Thousands Of Tons Of Dye And Intermediates In Jiangsu Are Temporarily Shut Down, And High Prices Should Be Normalized.

Local dye giant Zhejiang Jihua Group Limited by Share Ltd (hereinafter referred to as "Jihua Group") announced in the evening of April 23rd that the company's wholly-owned subsidiary, Jiangsu Jihua Chemical Co., Ltd. (hereinafter referred to as "Jiangsu Ji Hua") made a time adjustment to the conventional maintenance plan in 2019, and advanced the maintenance plan originally scheduled for 2019 in 2019 to April 2019, and carried out safety inspection and upgrading of the related equipment and technology. During this period, the company upgraded the automation upgrading project.

Kyrgyzstan said that in response to the government's call for environmental protection and safety production to promote green development, safety development and high quality development of the company, the company decided to temporarily suspend production in Jiangsu from April 23, 2019.

1. Carry out a new round of safety self-examination and upgrading of equipment and technology.

2, rectification and improvement of the problems raised in the acceptance of automation upgrading.

The temporary stoppage time is not more than 2 months, and may be adjusted due to the impact of changes in the relevant realistic uncertainties.

According to the financial report, as of September 30, 2018, the total assets of Jiangsu Ji Hua amounted to 1 billion 554 million yuan, accounting for about 31.63% of the total assets of the company, with a net assets of 1 billion 184 million yuan, accounting for about 28.12% of the company's net assets. In the first three quarters of 2018, its operating income reached 895 million yuan, accounting for about 41,09% of the company's first three quarter operating income, with a net profit of 229 million yuan, accounting for about 38.45% percent of the company's former three quarter net profit.

Ji Hua group said the company will take active measures to deal with the possible impact on the company.

First, the company has sufficient stock of dyes and intermediates.

The company's production adopts the way of combining production with conventional products, and the inventory of dyestuffs and intermediates is maintained at a relatively stable interval throughout the year.

The company has about 15 thousand tons of various dyes and intermediates, and the existing inventory of dyes and intermediates can basically meet the market sales during Jiangsu Jilin.

Second, the company has two production bases in Jiangsu and Zhejiang respectively.

The company is a wholly owned subsidiary in Zhejiang. Hangzhou Jihua Jiangdong Chemical Industry Co., Ltd. (hereinafter referred to as "Jihua Jiangdong") has the capacity to produce 70 thousand tons of dyestuff and intermediates annually. In 2016-2018 years, the annual capacity utilization rate of Jihua river east is about 85%.

When Ji Hua stopped production in Jiangsu, Jihua Jiangdong could adjust its production plan according to the actual situation, appropriately increase production and replenish sales demand.

Third, the temporary shutdown of the company is self checking, upgrading and upgrading. Jiangsu Ji Hua can choose the machine to resume production according to the actual situation of the market.

According to Kyrgyzstan group announcement, the first three quarters of 2018, Jihua Group's dye production and sales volume were 5.13 and 60 thousand and 500 tons, of which three quarter production and sales volume was 1.74/2.15 million tons, accounting for 34% and 36%, respectively.

Judging from the price of the products, the average price of the dye does not include the average price of 4.2 yuan / ton in the three quarter, which is 31.4% higher than that in the first half. The price increase in the three quarter also resulted in the 51.2% increase in the average price of the dye in the first three quarters.

At the same time, the three quarter product prices rose to the three quarter gross profit margin of 42.7% in the single quarter. The industry believes that under the pressure of domestic environmental pressure is not obviously relaxed, combined with the performance of spinning and weaving terminal data steadily, the price of dye is expected to remain high.

Yuan Jiancong, an analyst with CITIC Securities, said.

From the perspective of industry investment, the dyestuff industry will once again enter a tight balance between supply and demand, and product prices are expected to continue to rise during the peak season of demand. Relevant leading enterprises are expected to fully benefit from the upgrading of the industry boom.

At present, the concentration of disperse dyes is also high. The price of benzene and two amine will increase the price of disperse dyes. The production capacity of disperse dyes in Zhejiang Longsheng, Ru Tu shares and Jihua Group is 130 thousand, 110 thousand and 100 thousand tons respectively, accounting for more than 60% of the total capacity. The leading enterprises have strong pricing power, and the price of disperse dyes is expected to continue to improve.

In Yuan Jiancong's view, the impact of the tianjiayi explosion accident in Subei garden is expected to continue. The observation is: the first is the optimization of the industry competition pattern, the further improvement of the concentration of the industry, the impact of other large enterprises' production capacity, and the incompleteness of the small enterprises' industrial chain. The small enterprises may gradually withdraw from environmental pressures. Two, the difficulty of new production capacity is increased, while the demand for the industry increases with the growth of the textile industry, and the supply and demand pattern is expected to be tight for a long time. From the price point of view, it is predicted that the price of the intermediate amine two amine will have room for further increase; the disperse dye dealers and the downstream inventory are low, and the actual paction price is expected to continue to rise.

The first textile network has reported that in recent years, the production capacity of dyestuff company has remained stable. In the next 3 years, Zhejiang Longsheng plans to add 20 thousand tons of reactive dyes in 2018, 15 thousand tons in Jihua Group in 2018 and 10 thousand tons in 2018. The total added capacity is 45 thousand tons, and the new production capacity is relatively small, which has little impact on the industry.

And the new capacity is mainly concentrated in the industry leader, will further enhance the concentration of the industry.

According to historical statistics, in the fourth quarter of the year, the printing and dyeing enterprises are in the stage of digestion and inventory, and the price of dyes is low in the low demand season.

In the first quarter of next year, the traditional demand season is coming, printing and dyeing enterprises have entered a new round of replacement inventory stage, and the demand for dyestuffs has increased significantly.

The difference between 2018 and previous years is that in the low price of the off-season in the past year, dealers will actively stockpile replenishment stocks, while the disperse dye price will be at 30 thousand / ton in late 2017, compared with the price of more than 20 thousand / ton at the end of 2016.

In the process of rising prices, dealers do not intend to bulk up their stores. Therefore, inventory is relatively low in previous years, and the need to strengthen the downstream positions is strengthened. Yang Chao believes that the replenishment of printing and dyeing industry will soon enter the peak period.

In Yang Chao's view, dye prices are greatly influenced by upstream raw materials and downstream demand, and disperse dyes and reactive dyes, the top two of domestic output, occupy nearly 80% of the market.

The cost of dye production is greatly influenced by the price of upstream intermediates, and the selling price is greatly affected by downstream demand.

Raw materials account for over 70% of dye production costs, and intermediates occupy most of them.

For example, the amount of six bromine and intermediate reduced blue ANT intermediates accounted for 27%, while the cost of raw materials accounted for 81%.

For reactive black KNB, the intermediate pairs of esters and intermediates accounted for 58% of HA and the cost of raw materials accounted for 98%.

It can be seen that the price of dye intermediates directly affects the profitability of dyestuff industry.

As the third largest dye production enterprise in China, the Jihua Group has disperse dyes and reactive dyes, which are 70 thousand tons / year and 15 thousand tons / year. The company has a complete industrial chain from basic raw materials, energy to supporting intermediates until the "three wastes" treatment. The advantages of integration are obvious. In the intermediate area, it can realize the self supply of HIC and para ester, and has strong cost advantages and thickened the profit margins of enterprises in the situation of environmental protection and safety reasons caused by frequent accidents and frequent price increases.

According to public information, Jihua Group is a domestic dyestuff giant. The company has 70 thousand tons of disperse dyes, 15 thousand tons of reactive dyes, 10 thousand tons of other dyes, and 20 thousand tons of intermediate acid.

Performance, the first three quarters of 2018, Ji Hua Group achieved operating income of 2 billion 180 million, an increase of 13.9% over the previous year, attributable to the parent company's net profit of 550 million, an increase of 81.3% over the same period, of which, in the three quarter of 2018, the operating income of the 810 million quarter was 810 million yuan, up 19% over the same period last year. The net profit attributable to the parent company was 230 million yuan, up by 127.1% compared with the same period last year. The main reason for the increase was due to the promotion of sales price of dyestuffs and intermediates under the influence of environmental protection.