The price of disperse dyes were pushed up again! Jiangsu Tianjiayi Chemical Co., Ltd., which had a particularly severe explosion on March 21, has a capacity of 17,000 tons/year of m-phenylenediamine (dye intermediate), which is the second largest core production plant in the industry. The shortage of phenylenediamine supply and rising prices have led to a surge in the prices of downstream disperse dyes.

I. The reduced supply of raw materials

China’s phenylenediamine production capacity is about 99,000 tons/year, respectively, Zhejiang Longsheng Group 65,000 tons/year, Sichuan Hongguang Special Chemical Co., Ltd. 17,000 tons/year, Jiangsu Tianjiayi Chemical Co., Ltd. 17,000 tons/year. The explosion accident will affect about 20% of the market capacity of m-phenylenediamine, which will directly lead to an increase in the price of m-phenylenediamine, and the downstream disperse dye market will also rise.

According to reports, on the day of the accident, some disperse dye companies and intermediates companies have stopped receiving orders. The actual transaction prices of disperse dyes have increased in the past two days. The ex-factory price of m-phenylenediamine has risen from USD7100/MT to USD15,000/MT, the transaction price is unknown. Besides, the disperse dyes also began to increase rates from March 24, taking Disperse Blue 56, Disperse Red 60 as an example. At present, the price of Disperse Blue 56 is 25.45~31.30 USD/kg.

II. Many factors push up

In addition to the elements affected by the explosion accident, the price increase of disperse dyes was so related to the recent low inventory of downstream enterprises and the decrease of production capacity.

In March, printing and dyeing enterprises were not busy in the peak season, and the price of disperse dyes was very bearish. The level of disperse dyes in printing and dyeing enterprises and distributors was lower than that in the same period of last year. After the explosion, the market generally bullish disperse dyes. Under the psychological impact of the fall, the buyer’s orders surged, driving the price of disperse dyes to rise.

Besides, the reduction in disperse dye capacity is also an important reason. It is understood that there are about 150,000 tons/year of disperse dye capacity in northern Jiangsu province China. Due to factors such as environmental protection supervision in 2018, production is limited. After the explosion accident occurred in the company that has planned to resume production soon, the return to work has become far-reaching. Even if individual enterprises return to work, the output will be greatly reduced.

III. The market will remain high.

In the later stage, the disperse dye market will remain high.

In terms of raw material supply, after the explosion of Tianjiayi, the supply structure and actual production capacity of m-phenylenediamine will undergo major changes. It is expected that the theoretical production capacity of phenylenediamine will be reduced from the previous 99,000 tons to 70,000 tons in 2019. In terms of consumption, with the increase in dye production capacity, it is expected that the consumption of phenylenediamine will be over 80,000 tons in 2019. “Overall, the supply of m-phenylenediamine will continue to be short, and the price is likely to continue to rise, but the specific increase depends on how Zhejiang Longsheng and Sichuan Hongguang are priced. The rise in raw material prices will bring cost support to the disperse dye market.

Also, affected by this explosion accident, the chemical enterprises of the nitrification process and the hydrogenation reduction process will be subject to crucial verification, resulting in more supply of dyes and intermediates and lower prices.

It is reported that dye-related enterprises in Jiangsu Yancheng Xiangshui Ecological Chemical Industrial Park, such as Jiangsu Aonkyi Chemical Co., Ltd. and Jiangsu Zhijiang Chemical Company, are currently in a state of suspension.

Affected by this, the yellow dyes are expected to continue to rise after continuous price increases; Disperse Blue 60, Disperse Blue 56, Disperse Red 60 will also continue to rise, which in turn will lead other dyes to increase together.