Continued impact on the supply side

Continued impact on the supply side

Huatai Securities released the basic chemical industry research report on July 20. The summary of the report is as follows:

Frequent accidents, supply of dyes and intermediates are affected.

At the beginning of this month, Jiangxi Jiujiang Zhijiang Chemical exploded, causing three people to lose contact and three people were injured. The company is currently in production. Zhijiang Chemical is mainly engaged in the production of disperse dyes, such as p-nitroaniline and p-phenylenediamine. Important intermediates, which have been accidentally shut down, have caused shortage of raw materials for some downstream dye companies. At the same time, nearly 100 companies in Shaoxing Shangyu Industrial Park in Zhejiang have stopped production due to production accidents in some enterprises and strict requirements for environmental protection and safety production regulations. And there are still no signs of restart, including Yide Chemical (disperse dye / reactive dye capacity of 650,000 tons), Xincheng dyes and other dyes and intermediates.

Disperse dyes increased this week by 1000-2000 yuan / ton

Recently, the demand for downstream polyester and other products has gradually started, and the price of products has been gradually consolidated. The disperse dyes have the inherent upward momentum. At the same time, the recent contraction of supply ends has restricted the production of outsourced intermediate enterprises (large and medium-sized production capacity), and the price marginal shock factor has been significantly weakened. The leading ability of large enterprises has been strengthened; it is understood that the mainstream varieties of disperse dye leading enterprises will increase their prices by 1000-2000 yuan/ton this week, and the current price of dispersing black products is currently about 23,000 yuan/ton.

Dye follow-up price increase is sustainable

According to the notice issued by the Environmental Protection Bureau of Shangyu District at the beginning of the year: By the end of 2017, the number of chemical enterprises in Shangyu Park will be reduced from 173 to 100. By the end of 2020, efforts will be made to relocate chemical companies outside the Hangzhou Bay Development Zone. The total number of chemical enterprises in the region will be controlled within 90, and the contraction of dye supply is expected to be normal. On the other hand, the fourth batch of central environmental supervision will be launched soon. Key provinces such as Shandong and Zhejiang are listed, and small and medium-sized production capacity may be affected again. The follow-up price increase of dyes is sustainable.

Related company summary

Currently related listed companies of disperse dyes include: Zhejiang Longsheng (140,000 tons/year), Bauxite (110,000 tons/year), Jihua Group (70,000 tons/year) and Annoqi (36,000 tons/ year).

Risk warning: The progress of environmental protection and production restriction does not reach the expected risk, and the downstream demand does not reach the expected risk.