In July 2026, the disperse dye industry underwent a significant price adjustment, with the core intermediate reduced from 25,000 RMB/ton at the end of 2025 to 120,000 RMB/ton, an increase of nearly 300%. Another key raw material, p-nitrochlorobenzene, also rose from 3,500 RMB/ton to 14,000 RMB/ton. Zhejiang Longsheng and Runtu jointly raised prices of disperse dyes, with Disperse Black 300% series up by 3,000 RMB/ton and other colors by 1,000 RMB/ton. This round of price hikes is not a short-term fluctuation but a structural cost increase driven by tightened environmental policies and supply gaps.
Cost Transmission: Rigid Pressure from Intermediates to Dyeing Mills
The underlying logic of the intermediate surge lies in high supply concentration and environmental constraints. Only 7-8 companies in China can stably produce reduced and p-nitrochlorobenzene, making the industry highly concentrated. In 2026, regular safety and environmental inspections led to multiple intermediate plant shutdowns for maintenance, keeping market supply tight. New capacity approval cycles are long and construction difficult, making short-term supply gaps hard to fill. Keqiao dyeing mills have largely exhausted their dye inventories, and centralized restocking demand further pushes up procurement costs.
The disperse dye market itself is dominated by a few giants like Zhejiang Longsheng and Runtu. Their synchronized price adjustments mean a full industry-wide price increase. For Keqiao, the largest polyester fabric production base in China, disperse dyes are essential for dyeing polyester and polyester-spandex fabrics. Black and blue color series account for over half of local mills' capacity. A medium-sized mill's monthly dye procurement cost directly increases by hundreds of thousands of RMB. Coupled with two steam price hikes this year and new peak-valley electricity pricing in Zhejiang in July, the cost of high-energy-consuming processes like setting and dyeing has risen sharply. Dye, energy, auxiliaries, and labor costs are all climbing simultaneously.
Squeeze Dilemma: Off-Season Order Decline and Weak Bargaining Power
While upstream prices surge, the downstream is in a traditional off-season for fabrics. Order structures at Keqiao Light Textile City have changed significantly: large orders of tens of thousands of meters have sharply decreased, replaced by small orders of a few hundred meters and re-dyeing/color-matching orders. Frequent washing of dyeing machines and machine idling increase dyeing loss, with overall loss up 10%-20% year-on-year. Market prices are highly transparent, giving second-tier spot traders and large external buyers strong bargaining power. If a mill slightly raises dyeing fees, it risks losing orders to lower-priced competitors or even to Southeast Asian capacity transfers.
Many Keqiao mill owners admit that to retain orders during the off-season, they have to absorb the dye cost increases themselves, resulting in thin margins or even losses on orders. Shutting down machines means bearing equipment depreciation and fixed labor costs, leaving them in a dilemma. National Bureau of Statistics data shows that in Q1 2026, total profits of 2,036 above-scale printing and dyeing enterprises nationwide fell 16.1% year-on-year, with a loss-making ratio of 43.96%. The situation of Keqiao's small and medium-sized mills closely mirrors this national trend. Although textile exports show resilience, with cumulative exports of textile and apparel reaching $116.7 billion from January to May 2026, a slight 0.1% increase year-on-year, the incremental orders are mostly low-priced conventional fabrics that cannot support simultaneous dyeing fee increases.
Survival Strategies: Differentiation, Refinement, and Collaboration
Facing the current challenges, Keqiao enterprises can seek breakthroughs from three dimensions.
For Procurement Departments - Build a diversified supplier base to spread procurement risks and avoid over-reliance on a single intermediate or dye brand. - Sign medium-to-long-term contracts with quality mills during the off-season to lock in some dyeing fees and avoid sudden price spikes in peak season. - Focus on developing functional fabrics to offset cost increases through product differentiation premiums, avoiding pure price competition.
For Foreign Trade Companies - Establish cost-linkage mechanisms with overseas clients by including raw material price fluctuation clauses in contracts for periodic price adjustments. - Prioritize high-value-added orders and reduce the proportion of low-margin conventional fabric orders to enhance overall profitability resilience. - Leverage Keqiao's local industrial cluster advantages to jointly negotiate dyeing fee increases with multiple mills, preventing internal price wars.
From intermediate surges to collective dye price hikes by leading companies, this round of cost escalation will persist. With the traditional peak season for textiles in Q3 approaching, whether market demand recovery can ease cost pressures on the dyeing end remains to be seen. The entire Keqiao industry chain must continue to watch upstream intermediate supply changes.